Global network solutions provider Juniper Networks (NYSE: JNPR) reported preliminary financial results for the three months ended March 31, 2020 while providing its outlook for the three months ending June 30, 2020. Orders grew 10% on a year-over-year basis during the March quarter. Despite supply chain-related costs due to the COVID-19 pandemic, Juniper expects to see sequential revenue and non-GAAP earnings growth in Q2.
“With our stronger than expected demand, we believe our financial results would have exceeded the mid-point of our guidance if not for supply challenges we faced resulting from the COVID-19 pandemic,” said Rami Rahim, CEO of Juniper Networks. “While we are starting to see some weakness in our enterprise pipeline, which is impacting visibility into the second half of the year, we believe the overall momentum we are seeing speaks to the strength of our solutions, our strong customer relationships and the efforts we undertook to diversify the business across verticals and customers over the past several years.”
While Juniper Networks is optimistic regarding their long-term prospects and opportunity to gain share across each of our customer verticals, the company is withdrawing its previously announced full-year 2020 commentary because they cannot predict the specific extent or duration of the impact of the COVID-19 outbreak on their financial results.
Service Provider and Cloud Customers
Confidence in Juniper’s forecast is driven by strong backlog and healthy momentum with its service provider and cloud customers. Juniper believe these factors should help offset increased uncertainty in certain segments of the enterprise market. Due to the uncertain macroenvironment they have widened their revenue range for the second quarter though.
Juniper expects non-GAAP gross margin to be essentially flat sequentially relative to Q1. The company expect to see sequential volume driven improvements in margin during the June quarter to be offset by certain strategic insertion opportunities in addition to increased logistics and other supply chain-related costs due to the COVID-19 pandemic. Juniper expects second quarter non-GAAP operating expense to decline sequentially as it continues to focus on prudent cost management while continuing to invest to capture future opportunities.
“We are executing well despite the significant challenges created by the COVID-19 pandemic,” said Ken Miller, CFO of Juniper Networks. “We are making progress ramping our supply chain back to full productivity and continue to effectively manage costs while positioning the business for future growth. Our balance sheet remains strong and we continue to generate cash, which we expect will position us to not only weather the current crisis, but also to come out stronger on the other side.”
Juniper’s Board of Directors has declared a cash dividend of $0.20 per share to be paid on June 22, 2020 to shareholders of record as of the close of business on June 1, 2020.