A month has gone by since the last earnings report for Juniper Networks (JNPR). Shares have lost about 0.2% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Juniper due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Juniper Q4 Earnings Beat Estimates on Modest Revenue Growth
Juniper recorded relatively healthy fourth-quarter 2024 results, wherein the bottom line beat the Zacks Consensus Estimate while revenues missed the same. The leading provider of networking solutions and communication devices reported revenue growth backed by solid demand in the Cloud and Enterprise verticals. Management’s strong focus on expanding its secure, efficient and user-friendly network management solution suite are key growth drivers in the AI-driven networking market. However, weak demand in the Service Provider business is worrisome.
Net Income
On a GAAP basis, net income in the fourth quarter was $162 million or 48 cents per share compared with $124.3 million or 38 cents per share in the prior-year quarter. The 30% year-over-year growth was mainly driven by higher revenues and lower operating expenses.
Non-GAAP net income stood at $216.6 million or 64 cents per share compared with $196.9 million or 61 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 6 cents.
In 2024, GAAP net income declined to $287.9 million or 86 cents per share from $310.2 million or 95 cents per share in 2023. Non-GAAP net income was $574.5 million or $1.72 per share compared with $736.4 million or $2.26 per share in 2023.
Revenues
Juniper registered revenues of $1.4 billion, up from $1.36 billion in the year-ago quarter, driven by solid demand in the Cloud and Enterprise verticals. However, the top line fell short of the Zacks Consensus Estimate of $1.41 billion.
In 2024, the company generated $5.07 billion in revenues, down from $5.56 billion in 2023.
Product revenues totaled $870.2 million compared with $858.6 million in the year-earlier quarter. Net sales from Service were $533.9 million, up from $506.2 million in the year-ago quarter. The 5.5% year-over-year increase was driven by strong sales of hardware maintenance contracts and SaaS subscriptions.
By vertical, revenues from the Cloud business improved to $368.1 million from $317.3 million in the prior-year quarter. Revenues from this segment surpassed the Zacks Consensus Estimate of $367.08 million. This year-over-year increase was attributable to robust order growth from customers backed by growing investment in AI initiatives.
Revenues from Service Provider declined to $363.1 million, down 9.3% from $400.2 million reported in the prior-year period. Net sales fell short of the Zacks Consensus Estimate of $412.34 million.
Enterprise revenues grew 4% year over year to $672.9 million. The upside was backed by healthy demand for AI-driven Enterprise, hardware maintenance and professional services. Net sales beat our revenue estimate of $616.1 million.
By customer solution, Wide Area Networking revenues aggregated $420.1 million, down 7.5% year over year. Net sales from Campus and Branch were $332.8 million compared with year-earlier quarter’s tally of $321.2 million. Data Center generated $234.3 million in net sales, up from $180.8 million in the year-ago quarter. Hardware Maintenance and Professional Services reported $416.9 million in revenues, up 2% year over year.
By region, revenues from the Americas improved to $888.9 million from $849.7 million a year ago. Net sales from EMEA (Europe, Middle East and Africa) declined to $322.4 million from $335.8 million in the prior-year quarter. The downside in the EMEA region was induced by weak demand in the Service Provider business. In the Asia-Pacific, revenues improved 7.5% year over year to $192.8 million.
Other Details
Non-GAAP gross margin improved to 61% from 60.8% in the year-ago quarter. Favorable software revenue mix, easing of the supply chain and other-related costs boosted the gross margin.
Operating expenses, on a non-GAAP basis, rose to $588.3 million from $579.8 million, owing to higher headcount-related costs. Non-GAAP operating margin was 19.2%, up from the year-ago quarter’s tally of 18.3%.
Cash Flow & Liquidity
In the fourth quarter of 2024, Juniper generated $279.8 million of cash from operating activities compared with $9.1 million in the year-earlier quarter. In 2024, the company registered an operating cash flow of $788.1 million, down from $872.8 million in 2023.
As of Dec. 31, 2024, the company had $1.22 billion in cash and cash equivalents and $1.22 billion of long-term debt compared with the respective tallies of $1.06 billion and $1.62 billion in the prior-year period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Juniper has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Juniper has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Juniper belongs to the Zacks Wireless Equipment industry. Another stock from the same industry, Nokia (NOK), has gained 7.7% over the past month. More than a month has passed since the company reported results for the quarter ended December 2024.
Nokia reported revenues of $6.38 billion in the last reported quarter, representing a year-over-year change of +3.9%. EPS of $0.19 for the same period compares with $0.11 a year ago.
For the current quarter, Nokia is expected to post earnings of $0.05 per share, indicating a change of -50% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Nokia. Also, the stock has a VGM Score of A.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
