Telecom Not Big Part of Juniper's Good News

Juniper posted a record revenue quarter for its switching products, led by sales of its QFX product, and saw overall growth in revenues and profits, but the vendor admits sales in the telecom sector around the next generation of products remains a bit stalled. (See Juniper Grows Earnings, Sales in Q2 .)

The cloud vertical remained strong for Juniper Networks Inc. (NYSE: JNPR) as well, growing 14% sequentially and 32% year-over-year, while security sales lagged, despite new products in that segment, slipping 12% year-over-year. Overall, Juniper executives characterized the quarter as one of solid growth, and remained committed to hitting the "mid-point" of its projected 3% to 6% growth for the year. (See Juniper Q1: Cloud Rises, Security Sags.)

As for the telecom/cable sector, sales were down 2% year-over-year and 1% sequentially, and that was largely driven by a decrease in routing sales -- partially offset by an increase in switch sales. Cable sales, in particular, were down and those were partially offset by increasing sales in the US and EMEA telco vertical.

Overall, however, Juniper CEO CEO Rami Rahim characterized the telco and cloud verticals as "a little tale of two cities," especially where routing is concerned.

"Cloud is spending a lot on wide area networks, making sure their customers continue to get best experience overall," he commented on the earnings call. "We are seeing weakness in the telco vertical and that is a significant factor" in the decline in routing sales.

Rahim said Juniper is "very much engaged" with its telecom customers as they are pursuing new ways of delivering security and services to their business customers using cloud-managed solutions but "it's difficult to tell when it will result in revenue growth for us. We are doing everything we can to participate in the new modes of spend when they come."

Pressed on whether Juniper is eyeing acquisitions, as it seems to be reaching a more financially stable status, Rahim said Juniper might pursue "inorganic" ways of accelerating its SD-WAN activity but only after seeing better sales numbers from its current efforts to sell in that space. And he mentioned potential acquisitions in what he called the "new mode" of security, says he sees "quite a bit of innovation in enabling customers to migrate to the public cloud or hybrid cloud without compromising data, users and workloads."

For more on Juniper's earnings, see this report on our sister website Enterprise Cloud News.

— Carol Wilson, Editor-at-Large, Light Reading