Juniper Profit Jumps 70%; CEO To Retire

Computer networking gear maker Juniper Networks Inc. (JNPR) said Tuesday after the markets closed that its second quarter profit rose 70% from last year, helped by higher revenue and improved margins.

The company's quarterly earnings per share, excluding items, also came in above analysts' expectations as did its quarterly revenue. At the same time, the company gave an upbeat outlook for the third quarter.

"We're pleased with our strong second quarter results, which reflect our continued ability to execute on our strategy," said Kevin Johnson, chief executive officer of Juniper Networks. "We continue to see signs of strength in our key markets and we are confident in our routing and switching portfolio."

The company also said that its board of directors has approved an additional $1.0 billion share buyback authorization. The new authorization is in addition to the $1.0 billion stock buyback program approved in June last year. As of June 30, there was about $333 million of outstanding authorized funds under the company's current stock buyback program.

Additionally, Juniper said its chief executive officer, Kevin Johnson, will retire once a successor is named. The company's board has formed a search committee of independent directors to lead a comprehensive search process to identify the next CEO, and has retained executive recruiting firm Heidrick and Struggles to assist in the process.

Johnson will continue to serve in his current capacities while an orderly transition is accomplished, the company said.

Juniper shares are currently losing 1.36% in after hours trading after closing the day's regular trading session at $21.34, up 59 cents or 2.84%. The shares trade in a 52-week range of $14.55 to $22.98.

The Sunnyvale, California-based company reported net income for the second quarter of $97.9 million or $0.19 per share, compared to $57.7 million or $0.11 per share for the year-ago quarter.

Excluding items, adjusted net income for the second quarter was $148.1 million or $0.29 per share, compared to $103.1 million or $0.19 per share in the prior year quarter.

On average, 33 analysts polled by Thomson Reuters expected the company to earn $0.25 per share for the second quarter. Analysts' estimates typically exclude special items.

Reported operating margin for the quarter improved to 12.0% from 8.1% a year ago, while adjusted operating margin increased to 18.9% from 15.0% last year.

Net revenue for the second quarter grew 7.5% to $1.15 billion from $1.07 billion in the same quarter last year. Second quarter revenue also grew 9% sequentially. Thirty-one analysts had a consensus revenue estimate of $1.09 billion for the fourth quarter.

Americas revenue increased 15% year-over-year to $675.1 million and while Europe, Middle East, and Africa revenue grew 0.5% to $300.9 million, while Asia Pacific revenue fell 7% to $174.7 million.

During the second quarter, Juniper Networks repurchased 6.4 million shares for a total of $106 million.

Looking forward to the third quarter, the company forecast revenue of $1.14 billion to $1.18 billion and adjusted earnings of $0.29 to $0.32 per share. Analysts currently expect the company to earn $0.29 per share on revenue of $1.14 billion for the third quarter.

Juniper competes with networking giant Cisco Systems Inc. (CSCO) in the router industry.

by RTTNews Staff Writer

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