Juniper is laying off 280 employees this quarter, about 3 percent of its workforce, partly as a result of killing off its MobileNext product for the evolved packet core (EPC).
The company didn’t specify who’s being cut; in fact, Juniper added 201 employees during its third quarter, most of them “in lower-cost regions,” CFO Robyn Denholm said on the company’s earning’s call Tuesday. But CEO Kevin Johnson did say on the call that some of the cuts came from MobileNext’s demise.
Network World broke the story of MobileNext’s cancellation in August, and even then, it wasn’t a surprise. For a couple of years, analysts have assumed MobileNext wasn’t going to make it anyway. Juniper’s better shot at the EPC market would have come from its partnership with Starent, which got acquired by Cisco in 2009 — a move that appeared to take the wind out of Juniper’s mobile-networks strategy.
Thanks to network functions virtualization (NFV), though, Juniper can spin a nicer story. The EPC, which sits at the core of LTE networks, is one area being targeting for virtualization. That gives Juniper a reason to admit to (or even boast about) discontinuing a specialized, hardware-based product like MobileNext. “We believe that [the EPC] is going to become more of an x86-based, virtualized network function,” Johnson said.
Still Seeking a New CEO
Juniper’s earnings didn’t look terrible, lending credence to Juniper’s assertion that Kevin Johnson is retiring as CEO for personal reasons, not because of the business’ performance.
On Tuesday’s call, Johnson didn’t offer much of an update regarding the search for his replacement. “I would characterize the board as being in the late stage of that process,” he said.
For its third quarter, which ended Sept. 30, Juniper reported revenues of $1.19 billion and net income of $99.1 million, or 19 cents per diluted share. For the same quarter a year ago, Juniper reported revenues of $1.12 billion and net income of $16.8 million, or 3 cents per share.
Non-GAAP earnings of 33 cents per share beat the consensus estimate of 31 cents, as tallied by Bloomberg.
For its fourth quarter, Juniper is predicting revenues of $1.2 billion to $1.23 billion and non-GAAP net income of 35 to 37 cents. That’s on par with the analysts’ consensus of 36 cents per share, Bloomberg reported.