Light Reading

Juniper CEO Preps New Roadmap

Ray Le Maistre
1/24/2014
50%
50%

Juniper Networks CEO Shaygan Kheradpir, who is only days into his new job, is set to unveil what he calls an "Integrated Operating Plan" during the next few weeks following a review of the vendor's business. (See Juniper Names New CEO.)

Kheradpir told analysts during Juniper Networks Inc. (NYSE: JNPR)'s fourth-quarter earnings conference call that he would reveal a plan focused on "profitable growth and shareholder value creation."

The CEO said the plan would include a greater focus on product innovation, a more efficient cost structure -- that will have the company's near 9,500 staff wondering what's coming down the line, as more than 230 employees were axed during the fourth quarter -- and an evaluation of a "capital returns policy," which could involve share repurchasing and dividends.

The reference to "shareholder value creation" will have been heard loud and clear at activist investor Elliott Management, which tore into Juniper earlier this month and demanded major changes, including a greater focus on the service provider sector and an exit from the security market. (See Investor to Juniper: 'You Suck'.)

Elliott, which has had a very busy start to 2014, isn't happy with Juniper's financial performance, but there seemed little wrong with the router vendor's performance towards the end of 2013, as Juniper reported record sales and strong margin growth for the fourth quarter, as the table below shows. (See Riverbed Spurns Takeover Offer.)

Table 1: Juniper's Fourth-Quarter 2013 Key Financials

In US$ millions Q4 2013 Q4 2012 Change Full Year 2013 Full Year 2012 Change
Revenues $1,274 $1,141 12% $4,669 $4,365 7%
Operating margin 15.3% 11.5% Up by 3.8 percentage points 12.1% 7.1% Up by 5 percentage points
Net Income $151.80 $95.70 58.6% $439.80 $186.50 135.8%

Of the company's fourth-quarter revenues, $827 million (about 65% of the total) came from service provider customers. Those service provider sales are 12% better than a year earlier and 5% better than in the third quarter, while the full year's total revenues from service providers of $3 billion was 9% better than in 2012.

CFO Robyn Denholm noted on the conference call that Juniper also had strong bookings from service provider customers in the Americas, with particularly strong demand from cable operators and Web 2.0 customers. In Europe, service provider demand was strong in Germany, the UK, and Eastern Europe.

Denholm also noted that fourth-quarter router revenues were at $618 million, up 16% compared with a year earlier, and that bookings were "very strong," ramping by more than 30% year-on-year "driven by MX and PTX product lines," while demand for the new MX104 router is "off to a solid start." (See Juniper Aims Big With 100G Optical and SDN Middleman: A Second Look at Juniper's MetaFabric.)

Although revenues from security products were down 7% year-on-year to $157 million, the CFO noted that Juniper had seen encouraging signs that suggest a turnaround in the market.

Now Juniper's staff, customers, partners, and investors will wait for Kheradpir's new plan to see if he has anything radical up his sleeve. The company has already axed its mobile packet core line (MobileNext) in recent months: Will it be joined by any other product lines? (See Juniper Puts a Virtual Spin on MobileNext.)

— Ray Le Maistre, Editor-in-Chief, Light Reading

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
DOShea
50%
50%
DOShea,
User Rank: Blogger
1/24/2014 | 12:45:02 PM
The "You Suck" Singers...
Looks like another investor, Jana Partners, has joined the "You Suck" chorus, though it's done so while increasing its investment in Juniper... I guess everyone want to make sure their voices are heard by Kheradpir.

http://www.marketwatch.com/story/juniper-networks-microsoft-rally-igt-sinks-2014-01-24?reflink=MW_news_stmp

 
Ray@LR
50%
50%
Ray@LR,
User Rank: Blogger
1/24/2014 | 12:14:42 PM
Re: Juniper's security sales down 7% YoY
Great insights Patrick!

Of course, we have to wait and see if Kheradpir will give the security team time to push back at all... 
pdonegan67
50%
50%
pdonegan67,
User Rank: Light Sabre
1/24/2014 | 11:22:55 AM
Juniper's security sales down 7% YoY
The 7% YoY decline in Juniper's security sales lends credibility to F5's claims to be taking share from Juniper with its push into the security space with DNS security, Firewall, DDoS protection and other security capabilities.

The network security space is very dynamic at the moment. A lot of vendors with large footprints - folks like F5, Nominum, Infoblox - are looking to leverage large installed bases of networking equipment and evolve them to meet the operator's security goals.

Incumbent security specialists like Juniper are not having things all their own way in the telco space any more. There's some intense strategy and R&D work going on on this area. I'm expecting some epic contests for carrier mind (and wallet) share in 2014.

Juniper has suffered from indecisiveness in some carrier network segments of late but in the case of security where they have been - still are - the market leader I fully expect them to push back hard.
From The Founder
Light Reading sits down at CES with the head of Cisco's service provider video business, Conrad Clemson, to discuss how NFV and cloud security relate to video, the challenge of managing 4K/8K traffic, the global expansion of Netflix and virtual reality.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Documentaries
EANTC Tests Nokia IP Routing & Mobile Gateway VNFs for Real World Deployment

2|9|16   |   5:08   |   (0) comments


Nokia obtained validation of its virtualized router and virtualized mobile gateway capabilities through rigorous testing performed by EANTC. The results set a new industry benchmark for outstanding performance, scalability, resiliency and manageability. Nokia VNFs are ready for telco cloud deployment, so that service providers can accelerate mobile, business and ...
Between the CEOs
CEO Chat With Level 3's Jack Waters

2|8|16   |   26:15   |   (1) comment


Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
LRTV Custom TV
The Composable Telco

2|8|16   |   24:46   |   (0) comments


Heavy Reading's Principal Analyst Caroline Chappell presents the keynote at Light Reading's 2020 Vision Executive Summit in Dublin.
LRTV Custom TV
Join Us at the Digital Operations Transformation Summit

2|4|16   |   03:52   |   (0) comments


The Digital Operations Transformation Summit on February 21, 2016 at the Crowne Plaza Barcelona Fira Centre will bring together 50 senior executives to engage in a unique debate on the opportunities and challenges presented by the transformative evolving digital landscape. RSVP now at events@lightreading.com.
LRTV Custom TV
Making the Test: ADVA Ensemble Connector vs. Open vSwitch

2|4|16   |   01:28   |   (0) comments


Light Reading, in partnership with EANTC, recently tested ADVA's Ensemble Connector, which replaces open vSwitch and offers carrier-grade capability and interoperability. The test results strengthen ADVA's credibility as a provider in the virtualization space.
LRTV Custom TV
Bridging the Gap Between PoCs & Deployment in NFV

2|4|16   |   31:50   |   (0) comments


Charlie Ashton of Wind River presents the keynote at Light Reading's 2020 Vision executive summit in Dublin.
Between the CEOs
CEO Chat With Mike Aquino

2|3|16   |   17:34   |   (0) comments


The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Shades of Ray
MWC: Buckle Up for 5G & the IIoT

2|2|16   |   02:28   |   (0) comments


This year's Mobile World Congress looks set to be a 5G land grab and a chance to get down and dirty with the Industrial Internet of Things (IIoT) – but what will the 5G discussions actually be about?
LRTV Custom TV
Case Study: Building China's Next-Gen TV Networks

2|2|16   |   5:01   |   (0) comments


With over 2 billion viewers worldwide, Shenzhen Media Group is one of China's largest content producers. By partnering with Huawei and Sobey, SZMG was able to modernize media operations with the Converged News Center, a production studio that is a model for next-generation workflows.
LRTV Custom TV
Quad Channel Modulator Driver with 46 Gbaud Capability from MACOM

1|28|16   |     |   (0) comments


MACOM's MAOM-003427 is the industry's first surface-mount modulator driver with 46 Gbaud capability to support next generation 200G and 400G applications.
LRTV Custom TV
Video Infographic: Validating Cisco's NFV Infrastructure

1|26|16   |   02:24   |   (1) comment


We all know that the network of the future will be virtual, but when will virtual become a reality? This video infographic covers the four key areas in which Light Reading, in partnership with EANTC, tested Cisco's NFV infrastructure: performance, reliability, multi-service capabilities and single pane of glass management.

For the full report, see

Between the CEOs
CEO Chat With Phil McKinney, CableLabs

1|22|16   |   13:36   |   (1) comment


At CES in Las Vegas, we met with Phil McKinney, CEO of CableLabs. Phil provides an update on the rollout of DOCSIS 3.1, his views on the future of open source and how consumer interest in virtual reality could affect network traffic.
Upcoming Live Events
March 10, 2016, The Cable Center, Denver, CO
April 5, 2016, The Ritz Carlton, Charlotte, NC
May 23, 2016, Austin, TX
May 24-25, 2016, Austin Convention Center, Austin, TX
All Upcoming Live Events
Hot Topics
Google's 5G Radio Ambitions Are Expanding
Dan Jones, Mobile Editor, 2/5/2016
Cincinnati Bell Joins Weight Watchers Club
Alan Breznick, Cable/Video Practice Leader, 2/5/2016
Yahoo & Verizon Sitting in a Tree...
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 2/8/2016
Vodafone: Flexible Work Policies Boost Profits
Sarah Thomas, Editorial Operations Director, 2/8/2016
It's Time to Integrate OTT Video
Alan Breznick, Cable/Video Practice Leader, 2/8/2016
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Animals with Phones
Retro Is the Way to Be Click Here
Some animals are too cute for smartphones.
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and G.fast for copper plant evolution and the various deployment possibilities for FTTH/B.