Juniper Networks reported better-than-expected results for the fourth quarter and announced a 5 percent increase in its quarterly dividend. The company forecast a small annual increase in results for the first quarter and "modest" growth over the full year in 2020.
For the three months to December, net revenues rose 2 percent year-on-year to USD 1.208 million, ahead of the company's forecast. As expected, the company grew in the enterprise and cloud markets, while service provider sales remained lower. The adjusted operating margin improved to 20.3 percent from 18.3 percent a year earlier, also better than expected, while adjusted EPS dropped slightly to USD 0.58.
Over the full year, Juniper revenues were still down 4 percent to USD 4.445 billion, and net profit fell 39 percent to USD 345 million, hurt by higher taxes. Adjusted EPS dropped to USD 1.72, down 9 percent and in line with guidance.
Increase in adjusted costs for investments
For the first quarter, the company forecast revenues of USD 1.030 billion, plus or minus USD 30 million, an adjusted gross margin around 59.5 percent give or take 1 percent, and an adjusted operating margin of around 11.5 percent. Adjusted EPS is estimated at USD 0.27, plus or minus 3 cents.
Juniper said revenue and adjusted EPS should grow on a sequential basis beyond the first quarter, and the company expects "modest" growth over the full year. The adjusted gross margin should be flat to slightly up compared to 2019.
Adjusted operating costs will increase sequentially in Q1 due to variable compensation and typical seasonal increases in fringe costs. The costs should remain around the Q1 levels in the rest of the year. Overall, adjusted operating expense will be up on a full-year basis as the company invests to take advantage of market opportunities, but Juniper said it will maintain cost control and still expects earnings to grow in 2020.
