Networking equipment maker Juniper Networks (NYSE:JNPR) reported earnings Monday evening. The report, which covered the fourth quarter and full year of fiscal year 2019, edged out Wall Street's estimates thanks to "encouraging trends" in several key segments of Juniper's business.

Juniper Networks' fourth-quarter results by the numbers

Metric

Q4 2019

Q4 2018

Change

Analyst Consensus

Revenue

$1.21 billion

$1.18 billion

2.3%

$1.19 billion

GAAP net income

$168 million

$192 million

(12%)

N/A

Adjusted earnings per share (diluted)

$0.58

$0.48

21%

$0.57

Data source: Juniper Networks. GAAP = generally accepted accounting principles.

Juniper's routing revenue fell 4.6% year over year to $424 million due to soft orders from large-scale communications service providers. The service provider weakness should abate in the coming quarters as Juniper rolls out several new products in its edge routing portfolio.

On the other hand, switching sales rose 17% to $267 million. The company is enjoying strong interest in high-end switching products from enterprise customers. Juniper's management expects this trend to continue, giving the company a solid growth vector in the hyperscale data center market.

Security sales fell 3% to $100 million, but that's still a hefty 24% rebound from the trough seen in the third quarter.

"We are encouraged by the momentum we are seeing and the success of our connected security strategy, which focuses on bundling security with our traditional networking platforms," CEO Rami Rahim said in the fourth-quarter earnings call. "We think customers are increasingly looking to consume security as part of a networking solution and believe we are well-positioned to capitalize on this trend."

Ethernet and fiber-optic cables plugged into a large-scale network router

Image source: Getty Images.

Betting on better days ahead

Encouraged by healthier order trends in the fourth quarter, Juniper funneled $200 million into share buybacks while also boosting its sales and marketing budget by 10%. The stock has fallen 14% over the last 52 weeks, which amplifies the efficiency of Juniper's buyback program.

The generous stock repurchasing policy in the face of lower share prices also underscores the move as a vote of confidence. Management sees sunnier days ahead, to the point where share buybacks are viewed as a good use of Juniper's own cash. It's also a relatively low-risk idea since Juniper's stock is trading at just 14 times trailing earnings today.

But there's no need to rush into buying Juniper today -- Rahim sees 2020 as a year of stabilization rather than growth. 5G networks and increasing infrastructure investments across the telecom industry should provide strong growth catalysts in 2021 and beyond, but these long-term prospects will take some time to materialize.