By Craig Bowles
Juniper Networks (NYSE:JNPR) is slated to report 2Q 2014 earnings after the bell on Tuesday, July 22nd. The earnings release is expected at approximately 4:05 p.m. EST followed by a 5:00 p.m. conference call available at Juniper Investor Relations. The company designs, develops, and sells products and services for high-performance networks worldwide.
Outliers & Strategy
- Non-GAAP Earnings Per Share: Company guidance is for $0.36 to $0.39. The Street estimate is $0.38 (range $0.36 to $0.39) (source: Yahoo! Finance). Consensus is up from $0.36 three months ago.
- Revenues: Company guidance is for $1.20 bln to $1.23 bln. Analysts expect an increase of 6.0% y/y to $1.22 bln (range $1.20 bln to $1.24 bln).
- Adjusted Earnings Per Share Guidance for 3Q 2014: The current Street estimate is $0.44 (range $0.39 to $0.47).
- Revenue Guidance for 3Q 2014: The current Street estimate is $1.26 bln (range $1.23 bln to $1.28 bln).
- Juniper insiders sold 142,552 shares over the last six months. The company increased their stock buyback program in March. Shares worth $2 billion are to be repurchased (including the current ASR program) by the end of the first quarter of 2015.
- Jupiter's P/E of 27.8 compares to a 52.4 5-year average and an industry P/E 40.7, Price/Book of 1.9 compares to a 2.0 5-year average and an industry 2.7, Price Sales of 2.7 compares to a 3.3 5-year average and an industry 2.3, and Price/Cash Flow of 13.1 compares to a 13.7 5-year average and an industry -5.1.
- Jupiter Network's results are compared to networking and communication companies, such as F5 Networks (NASDAQ:FFIV), Riverbed Technology (NASDAQ:RVBD), Ciena (NYSE:CIEN), Palo Alto (NYSE:PANW), Aruba Networks (NASDAQ:ARUN), Cisco (NASDAQ:CSCO) and Alcatel-Lucent (NYSE:ALU).
- Juniper shares have a 1-day average price change on earnings of 7.12%. Options are pricing in an implied move of 4.57% off earnings.
- 07/14 Riverbed Technology's weak guidance could be isolated to the company but may be a warning for the sector, according to a post by WallStCheatSheet.com.
- 06/18 Morgan Stanley initiated the company at Equal-weight due to the new "aggressive" operating plan having earnings growth that is too high and increasingly competitive market for the "cloud builders" segment, according to a post by Benzinga.com.
- 06/4 Juniper Networks and Aruba Networks announced they have signed a strategic agreement to deliver open, converged wired and wireless network solutions.
- 05/30 Palo Alto's $175M settlement over patent violations with Juniper is seen as a positive for both companies (despite no royalty payments), according to a post by Zacks.
Juniper has been somewhat trendless the last decade, but remains above the highs of the previous two years even after the recent softness. Sector concerns have the stock testing below the recent balance in the $24.50 to $25.50 area. Upside has been seasonally limited to early year highs acting as resistance, which this year is just above $27. Downside has various support areas between $22 and $16. (Chart courtesy of StockCharts.com)
Juniper is undergoing some restructuring of their operations and faces intense competition in the cloud segment and security areas, so investors have some uncertainty. The company has beaten estimates three of the last four quarters, but traders have low expectations this quarter, so even meeting estimates could be viewed as a positive if next quarter's guidance is toward the high end of expectations.
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