Juniper Sees Cold Winter Ahead, Plans Dividend

Juniper’s October began on a sour note with the lowering of Q3 guidance.  Actual Q3 numbers were on the high side of that, but their look ahead into Q4 was decidedly chilly.  Actually, that’s pretty much what the case was back in July, when Q2 was inline but their Q3 forecasts came in light based on softening demand.  As trends go Juniper surely wishes a friendlier one was developing, but the stock is up slightly in the pre-market this morning as investors were ready for the news and Juniper offered a few incentives.

Revenue of $1.126B came in just ahead of the revised guidance, and non-GAAP earnings per share of $0.36 was at the high end.  But in Q4 they expect revenue to drop to $1.025-1.075B with non-GAAP earnings per share in the $0.28-0.32 range, which wasn’t even close to the $1.18B and $0.41 that analysts have projected.  Juniper has been under siege this year, with activist investors pushing for changes to reflect a shifting field of competition.

To mitigate any worries over sputtering revenue, Juniper moved to both cut more costs and return capital to investors.  On the cost cutting front, they added another $100M to their annualized cost-savings commitment by improved efficiencies, prioritization of revenue-generating projects, and  of course ‘careful management of headcount’ (which employees will surely be wary of).  On the capital-return front, Juniper approved a $1.1B increase to its stock buyback plan and declared a cash dividend for the fourth quarter.  They’ll issues $0.10 per share in December as a little Christmas present, with plans to increase that over time in-line with earnings.

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Categories: Financials · Telecom Equipment