Juniper Enterprise Networking Sales Slow

Juniper execs address Q1 2013 networking and security weaknesses in earnings call.

By Sean Michael Kerner | Posted Apr 24, 2013
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Juniper Networks reported its first quarter 2013 results this week, revealing some weaknesses in the vendor's enterprise networking and security platform divisions. Juniper execs explained and addressed these weak spots in a recent earnings call.

For Q1 2013, Juniper reported revenue of $1.06 billion, a three percent year-over-year gain. Net income came in at $91 million, or $0.18 per share. Moving forward, the company provided Q2 guidance for revenues to range from $1.07 to $1.10 billion.

Service provider revenues up

"Service provider was a good story for us in Q1, with our third consecutive quarter of year-on-year growth," Johnson said. "The U.S. market for routing continues to strengthen as we anticipated, while Verizon and AT&T were ten percent customers for us in the quarter."

During the quarter, Juniper announced a new converged supercore router, the PTX3000. The PTX 3000 is an eight-slot chassis with up to 240G of forwarding per slot.

Enterprise networking revenues go flat

While Juniper's service provider business continues to grow, its enterprise networking business has faltered.

"Enterprise is a more challenging market at present, with flat year-on-year performance," Johnson said, explaining that "a lot of the challenge stems from weak public sector spending, in particular U.S. federal, along with softness in financial services. "

Johnson noted that Juniper does not expect the slowdown in U.S federal government spending to improve in the near term. Government spending does not reflect Juniper enterprise networking performance in the private sector, however. Taking U.S. federal government business out of the customer mix reveals that the rest of the enterprise networking segment actually increased five percent compared to the third quarter of last year, said Juniper CFO Robyn Denholm.

"While the enterprise market has seen challenges across several verticals in recent periods, we are committed to continue investment across our businesses of routing, switching, and security, and we are confident in our products and our roadmap," Johnson said.

Security platform revenues drop

Another area of quarterly weakness for Juniper was in its security platforms. Juniper reported total security product revenue of $137 million for Q1, down nineteen percent both sequentially and year-over-year.

"Despite disappointing results in security in Q1, we believe we are taking the right steps to improve the business," Johnson said.

One of the new steps Juniper has taken is its February announcement of the Juniper Secure Spotlight service. Spotlight is a Big Data-backed technology that tracks individual devices and malware to help prevent attacks.

Bob Muglia, executive vice president and general manager of the software solutions division at Juniper, said that overall, he once again sees Juniper as competitive in the data center arena, noting that the vendor is working to correct some areas of product deficiency. Muglia is helping spearhead Juniper's SDN service chaining vision.

"We feel like we've made good progress in the data center space with what we've introduced," Muglia said. "We still have work to do in campus and branch, which is a large part of the enterprise market, but that's an area of continued focus on the team, and this is a multi-quarter transition."

Sean Michael Kerner is a senior editor at Enterprise Networking Planet and InternetNews.com, the news service of the IT Business Edge Network, the network for technology professionals. Follow him on Twitter @TechJournalist.

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