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How Juniper Networks Is Increasing Its Shareholder Value

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Share repurchases

Juniper Networks (JNPR) repurchased $125.0 million in shares and paid $38.0 million in dividends in fiscal 1Q17. Between 1Q14–4Q16, the company returned ~$4.1 billion of capital to its shareholders, achieving its target.

In 1Q17, Juniper Networks’ cash flow from operations totaled $545.0 million, which was $373.0 million higher than in 1Q16. The rise was due to what the company called “customer collections from significant invoicing that occurred in late Q4’16.”

In Juniper Networks’ commentary on its 3Q16 results, the company affirmed its commitment 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 sector spent the most in buybacks. Among the top ten companies that spent the most on share buybacks, three belonged to the technology sector. Apple (AAPL) spent the most, followed by tech (QQQ) heavyweights Microsoft (MSFT) and Oracle (ORCL).

Other important highlights in 1Q17

Juniper Networks’ (JNPR) demand metrics are strong. Its product-to-bill ratio was more than 1.0. In 1Q17, its product deferred revenues reached $281.0 million, which represents a rise of $20.0 million, or 8% YoY (year-over-year).

Juniper’s R&D[1. research and development] expenses rose 10.4% YoY in fiscal 1Q17 to $239.6 million. R&D accounted for 19.6% of its total revenues in fiscal 1Q17, compared to 20.6% in 2016, 20.5% in fiscal 2015, and 21.7% in fiscal 2014.

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