Juniper’s results beat expectations
Juniper Networks (JNPR) had another strong quarter in 3Q16, prompting the management to say that the company is succeeding in its strategy to tap opportunities created by the shift to cloud computing. The company reported EPS (earnings per share) of $0.58 on revenue of $1.29 billion. The results beat internal guidance and consensus estimates that called for EPS of $0.52 on revenue of $1.25 billion.
Juniper posted EPS of $0.57 on revenue of $1.25 billion in the comparable quarter last year.
In pursuit of cloud computing revenue
The chart above shows Juniper’s revenue trend for the last five quarters to 3Q16. Can the company keep its revenues growing in the coming years? The management wants investors to believe that it’s possible, as Juniper is targeting the cloud computing market with an expanding portfolio of routing and switching gears that could drive top-line and bottom-line growth.
Juniper told investors on the 3Q16 earnings call that it continues to see strong demand for its new products aimed at the cloud market. For instance, CEO Rami Rahim said sales of new QFX products rose 50% year-over-year (or YoY) in the latest quarter. QFX products are sold to cloud providers such as Microsoft (MSFT) and Amazon (AMZN) as well as cable and telecom companies.
Targeting multiple sectors in the cloud market and continued product differentiation are some of the advantages Juniper says could help it succeed. However, the company faces competition from Cisco Systems (CSCO), Nokia (NOK), and other networking gears providers, which are also aggressively pursuing cloud networking revenues as more enterprises transition to the cloud.
Juniper issued upbeat guidance for the current quarter. EPS is expected in the range of $0.59–$ 0.64. Revenue is expected to be in the range of $1.32 billion–$1.38 billion. The guidance compares favorably with consensus estimates calling for EPS of $0.60 on revenue of $1.32.