Juniper Networks, Inc. JNPR reported healthy second-quarter 2021 results, wherein both the bottom line and the top line beat the Zacks Consensus Estimate.
Investments in customer solutions and sales organization have enabled the company to capitalize on improving end-market conditions.
Of the top 10 customers in the quarter, four were Cloud, five were Service Provider and one was an Enterprise. The top 10 customers accounted for 33% of total revenues compared with 30% a year ago.
On a GAAP basis, net income in the June quarter was $62 million or 19 cents per share compared with $61.2 million or 18 cents per share in the prior-year quarter.
Non-GAAP net income was $141 million or 43 cents per share (above the mid-point of the company’s guidance) compared with $116.3 million or 35 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 4 cents.
Juniper Networks, Inc. Price, Consensus and EPS Surprise
Juniper Networks, Inc. price-consensus-eps-surprise-chart | Juniper Networks, Inc. Quote
Quarterly total revenues increased to $1,172.3 million (above the mid-point of the company’s guidance) from $1,086.3 million in the prior-year quarter, driven by growth across all verticals and regions. Juniper experienced record product orders during the quarter, which helped it grow backlog. The top line surpassed the consensus estimate of $1,145 million.
Product revenues (contributing 64.8% to total revenues) improved 9.7% year over year to $759.2 million. Service revenues (contributing 35.2% to total revenues) increased 4.8% to $413.1 million led by strong renewals and service attach rates.
By vertical, revenues in Cloud increased to $320.6 million from $285.5 million, which reflects solid momentum. Revenues in Service Provider increased to $443.7 million from $436.2 million in the year-ago quarter, indicating improved trends with some of the large strategic customers. Revenues in Enterprise improved to $408 million from $364.6 million, driven by strong momentum with new logos and an increased number of deals.
By region, revenues improved to $323.9 million from $294.1 million in the year-ago quarter in Europe, Middle East and Africa. Revenues in the Americas increased to $652.7 million from $608.8 million. In the Asia Pacific, revenues were up 6.7% to $195.7 million.
Gross profit was $681.9 million compared with $619.6 million in the year-ago quarter. Total operating expenses increased to $596.2 million from $529.1 million. Operating income was $85.7 million compared with $90.5 million a year ago. Non-GAAP operating income was $184.8 million, up from $155.2 million, with respective margins of 15.8% and 14.3%.
Cash Flow & Liquidity
During the first half of 2021, Juniper generated $437 million of net cash from operations compared with $369.8 million in the prior-year period. As of Jun 30, 2021, the company had $986.7 million in cash and cash equivalents with $1,694.4 million of long-term debt.
Due to the worldwide shortage of semiconductors, Juniper is experiencing component shortage, which is resulting in extended lead times of certain products and elevated costs. The company continues to strengthen its supply chain to enhance its resiliency and limit disruptions.
Juniper is witnessing strong momentum across its core industry verticals and is confident of its long-term prospects.
For the third quarter, it expects revenues of $1,200 million (+/- $50 million). Non-GAAP gross margin is anticipated to be 59.5% (+/- 1%). Non-GAAP operating expenses are expected to be $520 million (+/- $5 million). The company estimates non-GAAP operating margin to be about 16.2% at the mid-point of the revenue guidance. Non-GAAP net income is expected to be 46 cents per share (+/- 5 cents), assuming a share count of almost 330 million.
Zacks Rank & Stocks to Consider
Juniper currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader sector are 360 DigiTech, Inc. QFIN, Blucora, Inc. BCOR and Seagate Technology Holdings plc STX, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
360 DigiTech delivered a trailing four-quarter earnings surprise of 42.2%, on average.
Blucora pulled off a trailing four-quarter earnings surprise of 3.8%, on average.
Seagate delivered a trailing four-quarter earnings surprise of 11.4%, on average.
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