Though Juniper Networks beat analysts' revenue estimates for the third quarter and acknowledged livelier spending by service providers in results published this week, the company also cut about 280 jobs.
A Juniper spokesman gave us the official reason for the cuts: "Our headcount reductions are part of our effort to better align resources as part of our overall strategy and priorities going into 2014." The perceived cause, according to company observers: Juniper went soft in its outlook for the fourth quarter, predicting revenue of $1.2 billion to $1.23 billion, when analysts on average were expecting at least $1.23 billion. Michael Genovese, communications equipment sector analyst at MKM Partners, called Juniper's fourth-quarter outlook "conservative" in a research note.
Juniper's move is somewhat similar to what Cisco Systems did in August, when it announced 4,000 job cuts on the heels of a positive quarterly report. It also issued a weaker outlook for the upcoming quarter. (See: Cisco Caution Leads to Job Cuts.)
For the third quarter, Juniper beat analyst expectations with $1.186 billion of revenue and a $99 million profit. The company noted increasing service provider demand for its products to the tune of $788 million in revenue from that sector. It also expects that demand to sustain itself into next year. (See: Juniper Networks Reports Q3 Revenues Rise.)
Juniper recently announced upgrades to its MX Series routers. After this week's earnings report, the word circulating among analysts was that Juniper soon will have another major product announcement focusing on the datacenter. (See: Juniper Cards Pack Power Boost and Juniper Upgrades MX Routers.)
— Dan O'Shea, Managing Editor, Light Reading