Network equipment-maker Juniper Networks (JNPR) posted higher-than-expected results in the first quarter of 2014 on the back of healthy demand. Its results were driven by various strategic initiatives such as cost cutting and restructuring efforts that are driving its operational efficiency, leading to an increase of 150 basis points in its margins during the quarter. Juniper also managed to reduce its expenses by $160 million.
Juniper's revenue came in to $1.17 billion, an increase of about 10% year over year, outpacing the consensus estimates of $1.15 billion for the quarter. Its non-GAAP net income rose nearly 22% year over year to $142.6 million, or earnings of $0.29 per diluted share.
Superior outlook
Juniper Networks also provided a fine outlook for the second quarter as it expects its revenue to be in the range of $1.2 billion to $1.23 billion, while its earnings are expected to fall in between $0.36 and $0.39 per share, similar to the market forecasts of $0.36 per share.
Furthermore, the maker of computer-networking equipment plans to return at least $3 billion to its shareholders through stock repurchases and dividend over three years. The company has already bought back shares worth $900 million in the first quarter.
Opportunities ahead
Juniper Networks' revenue gaining products such as EX and QFabric are driving its growth in the enterprise market. Its enterprise revenue grew an amazing 46% in the reported quarter. Juniper has also witnessed strong momentum with its newly launched MX line of edge routers that has received positive response in the market and continues to grow. The company expects these products to drive its sales going forward and offset weakness in the core due to unevenness in order bookings.
The Integrated Operating Plan has added tremendous value to its restructuring plan that promises to streamline research and development costs, as the company focuses on the new consolidated R&D structure that should optimize its engineering resources. The IOP is estimated to eliminate about $160 million in annualized structural cost from its operations.
The company has experienced solid demand from its service providers across web 2.0, cable, and carriers worldwide, as well as from the Americas Enterprise customers, all of which indicate incredible opportunity to penetrate further in the markets and lock up shares in the meaningful, high-growth segments like Cloud-Builder and High IQ networking.
According to a Cisco report released in February, U.S customers will download more data on their smartphones and tablets in 2018 than they did on their laptops in 2013. Hence, it should certainly help Juniper to increase its share in the telecom market. The telecom services business c
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