Juniper Networks’ CEO Rami Rahim used the words “confident” and “confidence” 15 times in the company’s fourth quarter 2017 earnings call. But apparently investors weren’t convinced that the company will return to revenue growth soon. The company’s stock is down about 10 percent this morning.

Juniper reported net revenues of $1.24 billion for the fourth quarter that ended Dec. 31, 2017 — a decline of 11 percent compared to the same quarter in 2016. Non-GAAP net income for the quarter was $199.4 million, a decrease of 22 percent year-over-year, resulting in earnings per share of $0.53.

“While we’re not satisfied with our second half 2017 results or our outlook for Q1 2018, we’re confident that we have the right strategy and solution portfolio needed to win in the market and drive a return to growth by the end of 2018,” said Rahim. “Based on this confidence, we have announced a new $2 billion buyback authorization.”

The company plans to get the buyback funds by repatriating $3 billion. This is made possible by the tax holiday in the U.S. for companies that want to bring back overseas cash. In addition to the stock buyback, Juniper will increase its quarterly dividend by 80 percent to $0.18 a share.

Besides disappointing earnings for Q4 2017, Juniper’s guidance for its first quarter 2018 concerned investors as well. William Blair analyst Dmitry Netis noted that its revenue and earnings per share guidance fell short of consensus by $106 million and $0.17, respectively. “The midpoint of revenue guidance implies a 14 percent year-over-year decline,” wrote Netis in research note.

For the last couple of quarters, Rahim has been making the case that the company is in the midst of a transition as some big cloud customers re-architect their networks and as the line between routing and switching blurs.

But Netis wrote, “While management previously expected several quarters of headwinds from delays in project deployments due to an architectural transition at several key cloud customers, we were surprised to learn this transition could last for the entirety of 2018.”

Competition with Arista

Juniper claims that several of its cloud customers are shifting from scale-up to scale-out architectures, which is causing the weakness in its routing business.

But Jefferies analyst George Notter noted that cloud operators have been running scale-out data center networks for years now. Notter speculated that Juniper’s MX routing business is getting re-priced by lower-cost technologies such as its own PTX routing platform.

“Moreover, it’s clear that Arista’s R-series products are gaining traction in the marketplace,” wrote Notter. “Contrary to the Juniper view, we suspect these trends won’t get resolved in the near term. More likely, these impacts seep into other customer verticals as well.”

For the full year 2017, Juniper reported net revenues of $5.03 billion, an increase of 1 percent year-over-year. Non-GAAP net income was $809 million, flat year-over-year, resulting in earnings per share of $2.11, an increase of 1 percent year-over-year.

And for the full year 2017, routing declined 7 percen with Juniper blaming the ongoing architectural transitions in the cloud vertical. The company’s switching business had a record year, up 12 percent driven by its QFX product, which grew 25 percent. Security declined 8 percent for the year.

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