& cplSiteName &

Juniper Announces 'Integrated Operating Plan'

Light Reading
News Wire Feed
Light Reading
2/21/2014
50%
50%

SUNNYVALE, Calif. -- Juniper Networks (NYSE: JNPR):

  • Strategic focus on highest growth opportunities in networking as customers migrate to High-IQ Networks and best-in-class cloud environments -- where Juniper excels
  • An optimized One-Juniper structure -- reinvigorating the heritage of a mission-driven culture
  • Enhanced operational efficiency expected to result in a 25% operating margin for 2015 -- an approximate 580 basis point improvement vs 2013
  • Aggressive capital return plan, returning a minimum of $3 billion of capital to shareholders over the next three years, including more than $2.0 billion in share repurchases through Q1 2015
  • Company to initiate $0.10 per share quarterly dividend to commence in Q3 2014, with the intention to grow it over time
  • Two new highly qualified independent directors to be nominated to Juniper's board

    Juniper Networks (NYSE: JNPR) today announced its new, integrated operating plan (IOP) to refocus the Company on innovation that matters most to service providers and enterprises where demand for High-IQ Networks and best-in-class cloud environments are driving growth. As noted in the Company's fourth quarter and fiscal year 2013 financial results call, Juniper has undertaken a comprehensive and ongoing review of the Company's business and customer needs to provide a more focused R&D and go-to-market program, to drive efficiencies and a significantly increased operating margin profile, and to aggressively return capital to shareholders and create substantial shareholder value.

    "The cornerstone of our IOP is the belief that our customers, which include some of the world's largest service providers, financial services companies and government agencies, are increasingly building hyper-scale, resilient, secure, highly intelligent, open and virtualized networks," stated Shaygan Kheradpir, chief executive officer of Juniper Networks. "As a pure-play, high-performance networking company with engineering and organic innovation at its core, I believe Juniper is uniquely positioned to help these customers address their rapidly evolving networking needs. Our new, sharpened focus will bring us closer to our customers as we innovate together to address the opportunities ahead, and will enable us to operate much more efficiently as One-Juniper."

    The IOP includes four key elements:

  • A strategy that capitalizes upon Juniper's engineering expertise across routing, switching, security, control and network management -- and that is most aligned to being a leading provider of secure High-IQ Networks and serving the needs of Cloud Builders. Juniper is a growth company with strong business momentum as demonstrated most recently in its Q4 2013 financial results where it reported record revenues and 11.6% year-over-year growth, representing its sixth consecutive quarter of year-over-year revenue growth. Kheradpir, who joined Juniper as CEO last month, has fully reviewed Juniper's businesses and intends to focus on the fastest growing networking segments -- where Juniper excels -- driven by service provider, enterprise and government customers who are increasingly investing in High-IQ Networks and best-in-class cloud environments. The Company believes focusing on these markets represents the greatest opportunities for sustainable top-line growth and operating margin expansion over the long term.
  • An optimized One-Juniper structure: Juniper will create a more focused, connected, agile and execution-oriented company structure driven to deliver on its customers' imperatives for High-IQ Networks and cloud environments. Having engaged in a comprehensive evaluation of our product portfolio, the Company will coalesce its engineering talent, go-to-market teams and R&D around the above strategy. This will also result in streamlining its operations and business portfolio. The optimized One-Juniper structure will focus on quality, depth and what matters to customers; will augment its approach with an outside-in customer imperative fused with inside-out innovation; will reinvigorate its heritage of mission-driven culture igniting the energy and talent of its high performance teams working at scale; and will execute with the discipline of a results-driven organization.
  • Enhanced efficiency and improved cost management: Juniper's refocused strategy and optimized One-Juniper company structure will result in a substantial structural reduction to the cost base and a significantly increased operating margin profile through highly detailed and executable actions with directed accountability. The Company expects to exit the first quarter of 2015 with annualized operating expense savings of $160 million from the Q4 2013 level and achieve an operating margin of 25% for 2015 -- an approximate 580 basis point improvement from 2013 -- with operating expenses of 39% of revenue.

    To ensure that costs are removed in an accountable and efficient manner, Juniper established a Cost Control Committee led by Kheradpir and tasked with implementing efficiencies throughout the organization. Juniper has also retained McKinsey Technology Cost Structure Team, a nationally recognized cost consultant, who will work with the Cost Control Committee on the plan's effective implementation. Finally, to demonstrate the Company's accountability for achieving the IOP's cost reduction objectives and 2015 operating margin goal, Juniper will provide updates on the Company's progress on a quarterly basis.

  • Aggressive new capital allocation plan: Juniper also today committed to return a minimum of $3 billion to shareholders over the next three years through a combination of share repurchases and dividends. As part of this plan, the board of directors has authorized $2 billion in share repurchases to be executed through the end of the first quarter of 2015, including $1.2 billion through an accelerated share repurchase program to be entered into shortly. Juniper will also initiate a quarterly cash dividend of $0.10 per share of common stock beginning in the third quarter of 2014, with the expectation to increase the dividend over time. The expanded capital allocation plan will be funded by a combination of onshore cash and newly issued debt to preserve Juniper's financial flexibility to invest in future growth opportunities and maintain the Company's current investment grade credit rating. The Company intends to continue to review this capital return policy for additional capital return over time, subject to company financial performance, economic outlook and any other relevant considerations.

    "I joined this phenomenal company as an agent of change to enable Juniper to realize its potential through a more focused, agile, connected, and execution-oriented structure optimized to capture the significant and growing opportunity we see before us," added Kheradpir. "Our new integrated operating plan combines Juniper's heritage of innovation with an outside-in customer imperative, ensuring that we are best positioned to meet customer demands for integrated and use-case driven technology solutions.

    "The initiatives announced today are based on a comprehensive review of our business and customer needs, and we are confident that they will drive long-term, profitable growth by capturing greater share in the most meaningful market segments. In the near-term, we will align our cost structure around this new strategy and expect to deliver improved performance for our shareholders through operating margin expansion and a more aggressive capital return plan that preserves our ability to invest in innovation," concluded Kheradpir.

    Further, as part of its ongoing assessment of the composition of its board of directors, Juniper also announced today that the board will nominate for election at the 2014 Annual Meeting of Stockholders Kevin DeNuccio and Gary Daichendt as new independent directors. Daichendt previously served in several senior operating executive positions at Cisco, retiring from the Company in December 2000. He currently serves on the boards of NCR, Emulex and ShoreTel. DeNuccio has over 25 years of executive and public board experience, primarily in the networking industry. DeNuccio is the former president and CEO of Redback Networks.

    In addition, having completed the transition with Kheradpir, Kevin Johnson will retire from the Juniper Board at the end of February 2014.

    "On behalf of the entire board, and everyone at Juniper, I would like to thank Kevin for his numerous contributions to the Company," said Scott Kriens, chairman of the board of Juniper Networks. "I have known both Gary Daichendt and Kevin DeNuccio since the early days of Juniper. Both of these future directors have deep experience and great instincts in building and operating successful network technology companies, and we look forward to them bringing more of the same to the future of Juniper."

    In developing the IOP, Juniper considered the views of its stakeholders, and engaged in constructive discussions with shareholders including Elliott Management. Juniper has reached an agreement with Elliott whereby Elliott has agreed among various customary terms, to support the Company's changes announced today and to vote in favor of Juniper's nominees at its 2014 Annual Meeting of Stockholders.

    "Today's announcement is an incredibly positive development for Juniper and its shareholders," stated Jesse Cohn, portfolio manager at Elliott Management. "Shaygan and his team have developed a thoughtful and highly value-accretive plan to invest for growth, significantly streamline and target the operations, and meaningfully return capital to shareholders. Further, Shaygan and the Board, which will be adding two leading operations-focused executives, have impressed us with a focused commitment to accountability and execution of the plan. Elliott is highly optimistic about the Company's future and looks forward to supporting Juniper in its continued focus on creating shareholder value."

    Juniper Networks Inc. (NYSE: JNPR)

    (1)  | 
    Comment  | 
    Print  | 
  • Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
    DOShea
    50%
    50%
    DOShea,
    User Rank: Blogger
    2/23/2014 | 9:19:06 PM
    New board members
    The new board members both have, among other experience, histories with Cisco, Juniper has aways painted itself as the anti-Cisco, but perhaps having more influence from ex-Cisco types will work better than Juniper's previous predilection for ex-Microsoft types.
    Educational Resources
    sponsor supplied content
    Educational Resources Archive
    From The Founder
    The independent evaluation of Nokia's key virtual network functions (VNFs) was a defining moment for the Finnish giant.
    Flash Poll
    Live Streaming Video
    Charting the CSP’s Future
    Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it’s going from two industry veterans.
    LRTV Custom TV
    Cisco's Innovations in Cable

    5|26|16   |   03:18   |   (0) comments


    Marc Aldrich from Cisco discusses the latest in security, the evolution and momentum for CCAP and what the industry will be seeing next from Cisco.
    LRTV Documentaries
    Leading Lights 2016 Highlights

    5|25|16   |   02:26   |   (1) comment


    Some of the high points from this year's Leading Lights awards dinner at the Hotel Ella in Austin, Texas.
    LRTV Documentaries
    Light Reading Hall of Fame 2016

    5|23|16   |   05:43   |   (0) comments


    Find out who has been welcomed into Light Reading's Hall of Fame this year.
    LRTV Custom TV
    ZTE TM Forum Highlights

    5|23|16   |     |   (0) comments


    ZTE showcased its new ICT solutions at TM Forum in Nice.
    LRTV Interviews
    Gamma's MD on the Emergence of UC2

    5|20|16   |     |   (0) comments


    Gamma Communications Managing Director David Macfarlane believes the unified communications (UC) market has reached a tipping point.
    LRTV Custom TV
    The Ultimate 5-Minute Guide to Digital Customer Engagement

    5|20|16   |     |   (0) comments


    In this short video, you will hear all about how Digital Customer Engagement is the key to meeting customer expectations, keeping them happy, and maximizing revenue. VP Product & Marketing at Pontis, Ofer Razon, breaks down for us the five essential capabilities for successful Digital Customer Engagement. Don’t miss!
    LRTV Custom TV
    NFV in 2016: Part 1 – NFV Use Cases Get Real

    5|19|16   |   05:57   |   (0) comments


    Consensus is building around the key use cases for NFV, including managed IP services at the network edge and on customer premises, which can generate new revenues from enterprises/SMBs and consumers; Evolved Packet Core to support LTE migration; and adjacent technologies, such as TAS and IMS, to support VoLTE and next-generation charging and policy control ...
    LRTV Custom TV
    Nokia's Steve Vogelsang on NFV – Part 3

    5|19|16   |     |   (0) comments


    Steve Vogelsang discusses the challenges of operational transformation and how Nokia helps its customers. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
    LRTV Interviews
    Level 3: Why UC Is In Demand

    5|17|16   |   04:12   |   (1) comment


    Andrew Edison, Level 3's senior VP of sales, EMEA region, talks about the drivers of growth in the unified communications services market.
    LRTV Custom TV
    ARM's OPNFV Action

    5|17|16   |     |   (0) comments


    At the ARM booth at MWC 2016, Joe Kidder and Bob Monkman speak to Light Reading about OPNFV and their upcoming action.
    LRTV Custom TV
    Nokia's Steve Vogelsang on NFV – Part 2

    5|16|16   |     |   (0) comments


    Steve Vogelsang gives advice to service providers on how to move to NFV. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
    LRTV Interviews
    Interoute CTO on NFV's Maturity

    5|13|16   |   06:46   |   (1) comment


    Matt Finnie, CTO at international operator Interoute, explains how NFV has made life easier in terms of logistics and how Interoute can now enable a 'software-defined moment' for its customers.
    Upcoming Live Events
    September 13-14, 2016, The Curtis Hotel, Denver, CO
    December 6-8, 2016,
    June 16-18, 2017, Austin Convention Center, Austin, TX
    All Upcoming Live Events
    Infographics
    A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
    Hot Topics
    DT: Telcos Must Escape Vendor Prison
    Iain Morris, News Editor, 5/24/2016
    AT&T to Start 5G 'Friendly' Trial by 2016 End
    Dan Jones, Mobile Editor, 5/24/2016
    Cable Is Eyeing Its Retail Options
    Mari Silbey, Senior Editor, Cable/Video, 5/25/2016
    Verizon Backpedals on Go90
    Mari Silbey, Senior Editor, Cable/Video, 5/24/2016
    AT&T's Margaret Chiosi Retires
    Ray Le Maistre, Editor-in-chief, 5/25/2016
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
    Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
    Animals with Phones
    Live Digital Audio

    Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.