Juniper Beats Q3 Estimates But Warns Of Layoffs, Weak Federal Spend
Sunnyvale, Calif.-based Juniper, which announced the layoffs during a third-quarter earnings call with analysts, said the cuts will take place in its fourth fiscal quarter and will be made across the business.
While Juniper's third-quarter results beat analyst estimates, its fourth quarter outlook was weaker than expected, causing its shares to drop 2.35 percent in after-hours trading Tuesday. Juniper said it expects its fourth quarter revenue to fall between $1.2 billion and $1.23 billion, while analysts, according to data from Bloomberg, were anticipating $1.23 billion.
Juniper said its reservations around the fourth quarter are due largely to the recent government shutdown.
"We are carefully monitoring any impacts on federal spending from the recent U.S. government shutdown," said Robyn Denholm, chief financial and operations officer of Juniper.
Juniper's job cuts come roughly two months after rival Cisco announced plans to lay off 4,000 employees across its own global workforce.
Meanwhile, Juniper CEO Kevin Johnson, who in July announced plans to retire, confirmed Tuesday that the Juniper board is close to naming his successor.
"We are in the later stages of that process," Johnson said on the call. "There is no news to announce on that today, but I would expect that when they conclude, we will make that news available, certainly. And, just to remind you, that in the interim I continue to fulfill the role as CEO and will make sure that I am available to have a smooth and thoughtful transition to my successor."
For its third fiscal quarter of 2013, ending Sept. 30, Juniper reported a net income of $99.1 million, or 19 cents per share, up sharply from $16.8 million, or 3 cents per share, compared to the year-ago quarter. Juniper's revenue for the quarter came in at $1.19 billion, up 6 percent from $1.1 billion compared to the same quarter last year.
Juniper's enterprise business -- which includes federal -- pulled in third-quarter revenue of $397.3 million, down from $413 million in the year-ago quarter. The company's service provider business, however, rose from $705 million in the year-ago quarter to $788 million.
In terms of product divisions, Juniper's Platform Systems Division segment, which houses its routing and switching lines, reported revenue of $939 million, up from $828.5 million last year. Juniper's routing business was particularly strong in the quarter, with revenue jumping 22 percent year over year to $594 million. The jump was attributed, in part, to growth around Juniper's MSX 2020 edge series router line.
Juniper's security portfolio, however, continued to be a pain point, with revenue down to $144 million compared to $176 million last year.
Despite potentially soft federal spend, Johnson said his outlook for Juniper was bright, particularly given the accelerated launch of its new Contrail SDN controller, as well as its burgeoning software-defined networking stance, in general.
"The response we are getting from customers indicates our SDN and network function virtualization strategy continue to resonate with them," Johnson said.
PUBLISHED OCT. 22, 2013