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Why Juniper Networks' Margins Should Remain Pressured

Why Juniper Networks' Margins Should Remain Pressured

Juniper Networks (NYSE: JNPR) posted second-quarter revenue and non-GAAP (adjusted) earnings per share above the midpoint of management's guidance ranges amid coronavirus-induced challenges, but its operating margin kept declining. Juniper has been struggling over the last several years to adapt its networking portfolio to the emerging cloud computing paradigm. Its revenue growth and gross margin have been declining as it addressed cloud customers that command lower margins compared to service providers (wireline and wireless carriers and cable operators).