Earnings reports

Juniper Grows Earnings, Sales in Q2

SUNNYVALE, CA -- Juniper Networks, an industry leader in automated, scalable and secure networks, today reported preliminary financial results for the three months ended June 30, 2017 and provided its outlook for the three months ending September 30, 2017.

Net revenues were $1,308.9 million, an increase of 7% year-over-year and sequentially. GAAP operating margin was 19.7%, an increase from 16.7% in the second quarter of 2016, and an increase from 12.8% in the first quarter of 2017. Non-GAAP operating margin was 24.2%, an increase from 22.5% in the second quarter of 2016, and an increase from 20.8% in the first quarter of 2017. GAAP net income was $179.8 million, an increase of 28% year-over-year and 65% sequentially, resulting in diluted earnings per share of $0.47. Non-GAAP net income was $220.5 million, an increase of 15% year-over-year and 24% sequentially, and diluted earnings per share was $0.57.

"We had good revenue growth and earnings expansion in the second quarter," said Rami Rahim, chief executive officer, Juniper Networks. "We are executing on our strategy to lead the transformation to the cloud, and I am pleased with the continued strength in our cloud solutions. We believe our innovative product portfolio has us well positioned to expand our business opportunities as customers look for high-performance network solutions that deliver scale, performance and automation."

"We delivered solid profitability and continued to generate healthy cash flow from operations," said Ken Miller, chief financial officer, Juniper Networks. "We remain focused on delivering shareholder value through revenue growth and diversification, earnings expansion and an optimized capital structure."

Total cash, cash equivalents, and investments as of June 30, 2017 were $4,215 million, compared to $3,491 million as of June 30, 2016, and $4,044 million as of March 31, 2017. Net cash flows provided by operations for the second quarter of 2017 was $299 million, compared to net cash flows provided by operations of $360 million in the second quarter of 2016, and $545 million in the first quarter of 2017.

Capital expenditures were $32 million and depreciation and amortization expense was $55 million during the second quarter of 2017.

Juniper's Board of Directors has declared a quarterly cash dividend of $0.10 per share to be paid on September 22, 2017 to shareholders of record as of the close of business on September 1, 2017.

During the second quarter of 2017, the Company repurchased $125 million of shares and paid $38 million in dividends. In 2017, the Company intends to return approximately 50% of annual free cash flow to its shareholders, inclusive of share repurchases and dividends. Free cash flow is calculated as net cash provided by operating activities less capital expenditures.

Juniper Networks expects revenue growth for 2017 to be near the midpoint of its long-term model range of 3 to 6%. For the remainder of 2017, the Company expects similar gross margin dynamics as seen in the first half of the year.

The Company is focused on earnings expansion for the full year, through revenue growth, operating expense discipline, and strong execution. Juniper is driving to its long-term model of 39% of operating expense as a percentage of revenue for the full year. For the third quarter, ending Sept. 30, 2017, Juniper's guidance is as follows: revenues will be approximately $1,320 million, plus or minus $30 million; non-GAAP gross margin will be approximately 62.0%, plus or minus 0.5%; non-GAAP operating expenses will be approximately $500 million, plus or minus $5 million; non-GAAP operating margin will be approximately 24.1% at the midpoint of revenue guidance; non-GAAP tax rate will be approximately 27.5%; and non-GAAP net income per share will be approximately $0.58, plus or minus $0.03. This assumes a share count of approximately 385 million.

Juniper Networks Inc. (NYSE: JNPR)

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