Juniper Rides Service Provider Revenue Growth
While Juniper Networks is working its way through a corporate restructuring and watching personnel leave for other companies, these challenges apparently haven't slowed the vendor's ability to make sales in the service provider market.
Buoyed by a 10% increase in revenue from the service provider sector, a segment that represents about two-thirds of its overall revenue, Juniper Networks Inc. (NYSE: JNPR) reported first-quarter jumps in revenue and profit that beat consensus Wall Street estimates. First-quarter revenue came in at $1.17 billion, $783 million of which came from service providers. The company's profit was $110.6 million, representing an increase of more than 20% over the $91 million in net income the company reported in the first quarter of 2013.
It turned out to be a good day to tout Juniper's service provider successes. Just hours before the vendor's earnings call, Juniper was named as a supplier for AT&T's User Defined Cloud Program, a development about which Juniper CEO Shaygan Kheradpir said he was "very pleased." The selection may not come as a big shock, since Juniper has an ongoing relationship with AT&T, but the carrier's Supplier Domain 2.0 Program has added a new air of uncertainty to its vendor choices. (See AT&T Adds Amdocs, Juniper to Cloud Initiative.)
The overall tone of Juniper's earnings call late Tuesday was one of confidence, as CEO Kheradpir, who took control of the company last winter amid investor complaints, said Juniper continues to make progress on a restructuring program driven by Kheradpir's Integrated Operating Plan. (See Juniper Bows to Investor Pressure, Refocuses.)
Kheradpir said the company has largely completed its migration to an "optimized 'One Juniper' structure" designed to streamline its R&D, Go-To-Market and Operations units. He also said that by June, Juniper will be half way to its 2015 cost reduction goal of $160 million. One of the next steps in the Integrated Operating Plan is to begin offering a shareholder dividend. That will start next quarter at 10 cents per share, and will rise over time, he said.
Despite the good news, Juniper continues to face challenges, such as ongoing defections from its executive suites. Juniper sales veteran Shaun Page was the latest to make a move, joining Big Switch Networks, where he will be worldwide vice president of sales and work for another Juniper alum, Big Switch CEO Doug Murray. (See Big Switch Poaches Sales VP From Juniper.)
— Dan O'Shea, Managing Editor, Light Reading