Friday, 02 February 2018 05:36

Routing, cloud businesses ensure mixed quarter for Juniper

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American multinational networking company Juniper Networks has announced a year-on-year 11% fall in its fourth quarter revenue, down to US$1.24 billion which was, however, about US$10 million above the average analyst estimate.

For the full year, revenue was up 1% to US$5.03 billion. Product revenue fell 15.8% to US$830.4 million, while service revenue grew 2.3% to US$409.1 million.

The company said it expected earnings for the first quarter of 2018 to be below the forecasts made by analysts, with the reason being delay in deployments by its large cloud computing clients.

Chief executive Rami Rahim said the forecast was “not about a loss of share or footprint to the competition".

Said Rahim: "We reported mixed results for the fourth quarter. While revenue and non-GAAP EPS were both above the midpoint of guidance, gross margins remained under pressure and we continued to experience weakness in both routing and in the cloud.

"This weakness is primarily being driven by the shift to a scale out from scale up architecture, most notably at several of our largest cloud customers, which appear likely to persist through at least the upcoming quarter.

"This shift is impacting our financial results by creating near term revenue headwind as new architectures take time to roll out and ramp.

"And margin pressures as we look to disrupt our own business with new lean core technologies that deliver both material efficiencies for our customers and price performance advantages versus competitive platforms."

Cloud revenue for the fourth quarter was down by 37%, the biggest drop in at least the last four quarters.

The company said it would increase its quarterly cash dividend to shareholders bu US$0.18 per share, an increase of 80% compared to previous quarterly dividends.

“Our expanded capital return programme reinforces our ongoing commitment to delivering total shareholder value,” said Ken Miller, chief financial officer.

“The new buyback authorisation, anticipated ASR programme and increased dividend announced today reflect our confidence in Juniper’s long-term strategy.”

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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