Juniper Network’s recent cost-cutting and restructuring efforts appear to be paying off, with the Sunnyvale, Calif.-based networking vendor reporting first-quarter earnings Tuesday that beat analysts’ expectations.
For its first fiscal quarter, ended March 31, Juniper reported revenue of $1.17 billion, up 10 percent from the $1.06 billion it reported for the same period last year. Net income for the first quarter, Juniper said, was $110 million, up 21 percent from the $90 million it reported for the same period last year.
Analysts, according to Barron’s, were expecting Juniper to report revenue of $1.15 billion.
Juniper shares closed up 47 cents, or 1.85 percent, at $25.89 Tuesday prior to the release of the financial results.
Juniper’s better-than-expected first-quarter results come as the company pushes on with its Integrated Operating Plan (IOP), a broad cost-cutting and restructuring initiative driven by new CEO Shaygan Kheradpir. The plan, disclosed in February, was launched in response to mounting shareholder pressure from Juniper investors including Elliott Management, who openly urged Juniper to reduce operating expenses, reevaluate its product portfolio and scale back its research and development spending.
Kheradpir said IOP should save Juniper around $160 million by the first-quarter of 2015 and return $3 billion to shareholders over the next three years.
Juniper earlier this month disclosed in a filing with the U.S. Securities and Exchange Commission that it’s laying off 6 percent of its global workforce, or roughly 550 employees. Juniper also said it will stop developing the application delivery controller (ADC) technology it licensed from Riverbed in 2012, and that it plans on making specific cuts to its marketing organization in the second quarter.
Meanwhile, Reuters reported earlier this month that the company is mulling a sale of mobile security unit Junos Pulse.
“I am very impressed with the thoughtful and disciplined approach the team has taken to ensure the success of our IOP,” Kheradpir said on a call with financial analysts Tuesday. “We have already demonstrated our ability to execute quickly, as one unified organization, or what’s called ‘One Juniper.’ I want to thank all my colleagues around the world who have been responsible for implementing this plan and for delivering outstanding results this quarter.”
Juniper in the first quarter saw growth in both its service provider and enterprise business, with service provider revenue growing 10 percent year-over-year to $782.7 million and enterprise revenue growing 12 percent year-over-year to $387.4 million.
Juniper’s routing business, meanwhile, grew 7 percent year-over-year to $549.8 million, while its switching business shot up 46 percent year-over-year to $192 million.
Juniper’s security business continued to be a pain point, declining 2 percent year-over-year to $134 million. The company stressed, however, that it “remains firmly committed” to its security business, and that its high-end SRX line of services gateways saw 13 percent growth compared to the same period last year.
Looking ahead, Juniper projected a revenue of $1.2 to $1.23 billion for its second fiscal quarter.
PUBLISHED APRIL 22, 2014