How Is Juniper Networks Improving Shareholder Value?



Share repurchases

Juniper Networks (JNPR) repurchased $313.0 million in shares and paid $153.0 million in dividends in fiscal 2016. Since 1Q14, the company has returned approximately $4.1 billion of capital to its shareholders, thus achieving its target.

In 4Q16, Juniper’s cash flow from operations was $334.0 million, which was $88.0 million higher than 4Q15. The rise was due to what the company called “timing differences in working capital.”

In a press release, Juniper Networks stated earlier that it’s committed to a capital return policy of “approximately 50% of annual free cash flow, inclusive of share repurchases and dividends, after completion of the $4.1 billion capital return program.”

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In its December 2016 report, FactSet stated that among all industries, the IT (information technology) sector spent the most in buybacks, as you can see in the above graph. Among the top ten companies that spent the most on share buybacks, three belonged to the tech (technology) sector. Apple (AAPL) spent the most, followed by tech (QQQ) heavyweights Microsoft (MSFT) and Oracle (ORCL).

Other important highlights in 4Q16

Juniper Networks’ demand metrics are strong. Its product-to-bill ratio was more than 1.0. In 4Q16, its product deferred revenue was $323.0 million, which represents a rise of $83.0 million YoY (year-over-year).

Juniper’s R&D (research and development) expenses rose 2.0% YoY in fiscal 2016 to $1.0 billion. R&D accounted for 20.3% of its total revenue in fiscal 2016 compared to 20.5% in fiscal 2015 and 21.7% in fiscal 2014.


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