Juniper CEO Preps New RoadmapJuniper CEO Preps New Roadmap

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.)

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