Juniper Exits 2012 Improved, But Outlook Mixed

For its fiscal fourth quarter, reported Thursday, Juniper posted revenue of approximately $1.14 billion, up 2 percent from the third quarter and up 2 percent from the year-earlier quarter, and beat analyst estimates. It posted GAAP net income of $95.7 million, down from $96.2 million in fourth-quarter 2011.

"We are playing offense and are focused on making solid progress," Kevin Johnson, Juniper's CEO, said during the call.

[Related: Juniper Partner Conference: 10 Key Takeaways ]

Juniper had a challenging 2012, beset by mediocre earnings and a slow ramp-up for key product lines like QFabric, its data center system, as well as ongoing criticism that it's become a laggard in areas like enterprise security.

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At Juniper's recent Global Partner Conference in Las Vegas, however, Johnson told CRN that the company has fixed many of its problems and is a more sensibly organized company following the past few months of restructuring and layoffs.

Juniper used GPC to lay out a strategy for software-defined networking (SDN), including early details on a software licensing structure that will govern how Juniper partners sell its platforms in the future.

Bob Muglia, Juniper executive vice president, software systems, reiterated Juniper's strategy on the fourth-quarter earnings call and said Juniper is differentiated because it's a holistic, not piecemeal, view of the SDN shift. Muglia also said that Juniper has made substantial strides in security, and that big announcements from the company are coming during this year's RSA and Mobile World Congress conferences.

Juniper's overall performance in the quarter was mixed, with seemingly equal handfuls of positives and negatives. Key products like its SRX, EX and MX lines, for example, grew year-over-year at 17 percent, 8 percent and 7 percent respectively. But, Juniper's overall enterprise segment was down 10 percent year-over-year, primarily due to weakness in the Americas and especially among federal government customers, according to CFO Robyn Denholm.

Juniper's full-year 2012 revenue was about $4.36 billion, down 2 percent compared to 2011. It projected first-quarter revenue in the range of $1.05 billion to $1.07 billion.

Other notables from Juniper's report included the following:

-- Verizon accounted for more than 10 percent of Juniper's Q4 and total year 2012 revenue.

-- Juniper's security revenue was down 8 percent year-over-year, primarily due to its ScreenOS enterprise firewall business continuing to drag.

-- Juniper exited Q4 with 9,234 employees, including employees it acquired with Contrail Systems in December, down 350 heads from Q3.

-- Juniper's Americas theater overall was up 8 percent sequentially and 16 percent year-over-year, which Juniper attributed to an upswing in U.S. service provider spending.

-- Juniper is seeing increased interest in QFabric following the introduction of the midmarket-focused M-fabric last summer, according to new Platform Systems Executive Vice President Rami Rahim, though Juniper did not provide exact customer numbers.

Johnson said that QFabric had 130 new customers during the quarter, including a few "full-fabric customers."