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Juniper Q3 earnings in line with estimates, outlook bleak

The network equipment maker's chief executive blamed the "disappointing" quarter, which gave Wall Street the clear-cut signal to sell, sell, sell — driving shares down after-hours.
Written by Zack Whittaker, Contributor

Network equipment maker Juniper Networks published its fiscal third-quarter earnings on Thursday. And things were not looking so rosy for the company after the closing bell.

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Image: Juniper

The Sunnyvale, Calif.-based company reported a net income of $103.6 million, or 23 cents per share (statement). Non-GAAP earnings were 36 cents per share on revenue of $1.12 billion.

Wall Street was expecting earnings of at least 35 cents per share on revenue of $1.13 billion.

Revenue was roughly in-line with analyst estimates, and earnings were a hit. A bit of a so-so quarter, with little to get excited about.

The trouble is, revenues have declined year-over-year by 5 percent. That's going to be a problem if it continues.

The earnings report landed just two weeks after Siris Capital completed its purchase of the company's Junos Pulse unit, which was sold off about three months ago. The going price for the division was approximately $250 million.

In prepared remarks, chief executive Shaygan Kheradpir said he was "disapointed" with the quarter's results, citing weaker than expected demand from U.S. service providers He added:

"However, the underlying long-term demand trends in networking remain intact. While we navigate these dynamics, we are relentlessly focused on managing operating expenses while providing the innovation that matters most to our customers. We continue to have confidence in our business and see substantial opportunities to drive profitable growth and increase the value of our shareholders' investment over the long-term."

So things aren't looking so hot at the company right now. That isn't a surprise considering most of the tech industry has seen a ding in at least one of their fiscal quarters this year. (OK, forget Apple. It's doing just fine).

In a response to this, Juniper said it's going ahead with a cost reduction initiative, in a bid to cut down on $100 million in costs. That includes a "careful management of headcount," which signals job cuts could be on deck.

The company ended the quarter with $3.32 billion in cash, equivalents, and investments, compared to $3.48 billion at the end of the last quarter, down more than $710 million year-over-year. 

Juniper's board also approved a $1.1 billion increase in its capital return plan. The company said in a statement that it's "on track" to return as much as $4.1 billion back to shareholders ending 2016. 

To give shareholders a little (much-needed) good news, Juniper declared a fourth-quarter cash dividend of 10 cents per share, to be paid in time for Christmas. 

For its fiscal fourth-quarter earnings, Juniper said it expects revenues to land between $1.02 billion and $1.07 billion, far below expectations. Non-GAAP earnings per share are pegged for 28 cents and 32 cents. 

Wall Street was gunning for 41 cents a share on revenue of $1.18 billion.

Juniper ($JNPR) closed up 3.2 percent on the New York Stock Exchange on Thursday. In after-hours trading, shares tanked by more than 5.7 percent.

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