Juniper Networks (JNPR) reported a decline in its fourth-quarter sales, which also missed estimates, as the cloud business continued to experience weakness. Shares of the networking solutions provider dropped sharply following the announcement, despite the positive bottom-line performance, and continued to lose in premarket trading Wednesday.
Adjusted profit rose to $205.7 million or $0.59 per share in the fourth quarter from $199.4 million or $0.53 per share in the corresponding period of 2017. On an unadjusted basis, the company reported a profit of $192.2 million or $0.55 per share compared to a loss of $148.1 million or $0.40 per share in the year-ago period, helped mainly by the lower effective tax rate.
During the three-month period, revenues dropped 5% to $1.18 billion. The topline performance was negatively impacted by the continued weakness in the cloud and services business. However, operating margin moved up to 16.7% from 16.4% a year earlier.
The topline performance was negatively impacted by the continued weakness in the cloud and services business
“We are taking actions to drive improved sales execution and capitalize on the attractive end market opportunities that we expect to emerge in 2019. We remain confident in our strategy and believe we have the products needed to win in the market,” said CEO Rami Rahim.
The management plans to enter into a $300 million accelerated share repurchase program and increase the quarterly dividend by 6% to $0.19 per share.
Looking ahead, the company expects revenues of around $980 million for the first quarter, when adjusted earnings are expected to be about $0.20 per share. The estimated gross margin for the quarter, on an adjusted basis, is approximately 58.5%.
For fiscal 2019, Juniper forecasts adjusted earnings in the range of $1.75 per share to $1.85 per share. Full-year adjusted gross margin is estimated to be in the mid-point of the company’s long-term model. It is expected that the ongoing transitioning of the go-to-market organization will drive long-term growth.
Also see: Juniper Networks Q4 2018 Earnings Conference Call Transcript
During the December quarter, the board of directors declared a quarterly cash dividend of $0.19 per share, which will be paid on March 22, 2019, to shareholders of record on March 1, 2019.
Juniper shares plunged about 12% in pre-market trading Wednesday after closing the previous session sharply lower. The stock has gained about 6% in the past twelve months.