Light Reading

Juniper Sells Security Unit, Feels Carrier Pinch

Ray Le Maistre

Juniper took a hit Wednesday as it warned of a slowdown in US telco spending and continued its portfolio transformation under CEO Shaygan Kheradpir.

Despite a sequential and year-on-year increase in second-quarter revenues to $1.23 billion, the vendor saw its share price dip by more than 10% to $22.28 as it revealed how third-quarter revenues are set to be lower than previously expected due to "customer dynamics."

In its earnings release, Juniper Networks Inc. (NYSE: JNPR) noted that it expects third-quarter revenues to be in the range of $1.15 billion and $1.2 billion, and that "specifically, within US-based service providers, their market dynamics, including M&A activity, are impacting both sequencing and timing of projects." (See Juniper Reports Q2 Numbers, Sells Unit and Comcast-TWC: Merger of Equals in Poor Service?)

Financial analysts believe, quite reasonably, that the hit is coming from a change (which may or may not be temporary) in the spending habits of AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ).

In an emailed research note, George Notter at Jefferies & Company Inc. wonders if the two US operator giants might have "made good progress on routing capacity," and so do not need quite as much in the way of upgrades from Juniper. He believes that Juniper might be taking a combined hit of about $100 million from these two customers alone.

Mike Genovese at MKM Partners , meanwhile, believes that operator considerations around NFV could already be affecting their capex strategies. "The company is seeing lower 2H14 demand in North America due to the large cable merger, increased wireless focus at Tier 1 Service Providers and also, we believe, because of the NFV transition," he stated in a research note.

Need to know more about network functions virtualization and the cloud? Then check out the agenda for NFV and the Data Center, September 16 at the Santa Clara Marriott, Calif.

However, the consensus is that Juniper is doing well in other areas -- with the Internet giants and in federal accounts -– and that it is also doing well with its corporate cost controls, part of its new Integrated Operating Plan. (See Juniper Bows to Investor Pressure, Refocuses and Juniper Cuts Headcount by 6%, Axes ADC .)

As part of that plan, Juniper has sold its Junos Pulse mobile security portfolio for $250 million to Siris Capital, noting that this is consistent with its strategy to focus on "where its customers and the market is heading with High-IQ networks and building the next-generation of clouds."

Analysts noted that this sale wouldn't affect Juniper's profitability very much on an ongoing basis -- the Junos Pulse business is believed to be running at about break even -- but it does signal a step back from mobile security, an increasingly important sector for many of Juniper's network operator customers.

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
From The Founder
The comms industry is rallying to the cause of open, independent interoperability testing.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Interviews
Top Tips for FTTH Operators

10|8|15   |   02:26   |   (0) comments

At Gigabit Europe 2015, Ventura Team co-founder Richard Jones talks about some of the key business case considerations for FTTH network operators.
LRTV Interviews
M-net Calls for FTTx Unity

10|8|15   |   03:45   |   (0) comments

At the Gigabit Europe event, Jörn Schoof from M-net, the Munich city network operator, calls for industry collaboration on fiber broadband access rollouts.
LRTV Documentaries
The Business Case Challenge for NFV

10|7|15   |   03:47   |   (0) comments

Virtual CPE is one of the early success stories for network functions virtualization, as service providers are finding flexible, programmable CPE solves a lot of logistics problems and reduces their cost. But even here, Masergy Communications faced a business case challenge, says CTO Tim Naramore.
LRTV Interviews
JT Offers Some Gigabit Lessons

10|7|15   |   4:08   |   (1) comment

Barna Kutvolgyi, managing director, Global Consumer, at JT, the incumbent operator on the island of Jersey, talks about how other service providers can learn from his company's gigabit broadband rollout experiences.
LRTV Interviews
AT&T's Chiosi on the Potential of Open Source

10|6|15   |   06:27   |   (0) comments

AT&T Distinguished Network Architect Margaret T. Chiosi talks to Light Reading's Carol Wilson about the potential for open source technology to liberate communications service providers.
LRTV Interviews
Network Security in a Gigabit World

10|6|15   |   05:52   |   (0) comments

Masergy's James Harrison talks about some of the network security and data center issues network operators need to consider as they expand their broadband services portfolios.
LRTV Documentaries
Telefónica: In Search of Virtual Simplicity

10|5|15   |   07:30   |   (0) comments

Francisco-Javier Ramon Salguero, head of Telefónica's NFV initiative, admits virtualization initially means greater complexity, but with the right abstraction layer, it is possible to create a services-driven network architecture. He explains how Telefónica's current trials and initiatives are aimed at doing that, and what his company and other carriers need to ...
LRTV Interviews
Gigabit Europe Takeaways

10|5|15   |   03:47   |   (0) comments

Participants from the inaugural Gigabit Europe event in Munich share their key takeaways from the conference.
Women in Comms Introduction Videos
Intel Urges Women to Take Advantage of Their Seat at the Table

10|5|15   |   4:27   |   (1) comment

Have inclusive and constructive conversations, attach a bigger meaning to your work and get involved in the cause, Intel's Monique Hayward advises women in comms.
LRTV Interviews
BT Updates on Plans

10|2|15   |   03:16   |   (2) comments

Peter Bell, CIO at Openreach, the access network division at UK incumbent BT, provides an update on the operator's trials and how Openreach is planning to deploy the broadband technology in its street cabinets.
Telecom Innovators Video Showcase
Sonus Shakes Up SD-WAN

10|2|15   |   7:22   |   (0) comments

Sonus CTO Kevin Riley sat down with Light Reading to discuss the trajectory of the company, its SDN ambitions and why Sonus is taking a market-disruptive approve to SD-WAN.
LRTV Interviews
CityFibre's Gigabit Vision

10|1|15   |   03:18   |   (1) comment

Mark Collins, director of Strategy & Public Affairs at competitive UK city network operator CityFibre, talks about his company's plans to help build Gigabit Cities.
Upcoming Live Events
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
November 17, 2015, Santa Clara, California
December 1, 2015, The Westin Times Square, New York City
December 2, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Network appliances have a strong value proposition in today's networks and will continue to do so in the NFV and SDN-enabled networks of tomorrow.
Hot Topics
Eurobites: Dunroamin'
Paul Rainford, Assistant Editor, Europe, 10/2/2015
M&A Speculation Swirls Around Juniper
Ray Le Maistre, Editor-in-chief, 10/6/2015
Cisco's Chambers Rules Out Political Bid
Mitch Wagner, West Coast Bureau Chief, Light Reading, 10/6/2015
Infinera Fleshes Out Its Metro 100G Story
Ray Le Maistre, Editor-in-chief, 10/7/2015
AT&T Gets Green Light for VoWiFi
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 10/7/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
With so many new and exciting communications technologies now under development, it's easy to get caught up in the industry's escalating hype cycle. That's why the ...
Last week saw a big day in the 15-year history of Light Reading when Editor-in-Chief Ray Le Maistre and I were invited to interview the Deputy Chairman and Rotating ...
Cats with Phones
"What?! I'm on with Finisar about their stock price tanking" Click Here