Juniper Network’s security business is set for a significant evolution, after the company took an $850 non-cash impairment charge for fiscal 2014. The news about the impairment charge came during Juniper’s fourth quarter fiscal 2014 earnings call on January 27, where new CEO Rami Rahim provided some detail on how he’s going to move the business forward.
For the fourth quarter, Juniper reported revenue of $1.10 billion, a 14 percent year-over-year decline. For the full fiscal 2014 year, revenue came in at $4.63 billion for a one percent year-over-year decline.
The big line item for Juniper, however, is the $850 million charge for Juniper’s security business. Robyn Denholm, Juniper’s CFO, noted during her company’s earnings call that as required under GAAP accounting rules, Juniper is required to perform a regular review of the carrying value of goodwill.
“During Q4, this review resulted in an estimated non-cash impairment charge of $850 million related to the goodwill of our security reporting unit,” Denholm said. “There are several factors which contributed to this impairment, including the recent underperformance of this reporting unit and our assets to refocus our security offerings, in addition to the divestitures of Junos Pulse.”
Juniper sold off its Junos Pulse mobile security business for $250 million in a deal that closed on October 2, 2014.
Juniper’s CEO Rami Rahim acknowledges that the security business has underperformed. Rahim added that 2015 will be a year of stabilizing Juniper’s security revenue.
“To win in security, we are pivoting our strategy to building integrated solutions that focus our network resiliency and business continuity across cloud, data center, branch, campus and service provider mobile infrastructure,” Rahim said. “Our common thread through all of this is our Junos-based SRX platform, which is adaptable to serve all of these environments and can accommodate the security needs of any number of different use cases.”
Rahim added that the plan is to deliver what he referred to as “substantial enhancements” to the SRX platform in 2015.
Overall, Rahim has been busy so far in his tenure as Juniper’s CEO. Rahim was named Juniper’s CEO on November 10, 2014, after the surprise resignation of former CEO Shaygan Kheradpir.
“I have spent considerable time talking and listening to our customers, our partners and our employees,” Rahim said about his first few months as CEO. “Working with the senior leadership team, I set out key execution initiatives for 2015 aligned with our R&D and go-to-market strategy in the areas of routing, switching and security for both service providers and enterprise customers.”
Sean Michael Kerner is a senior editor at Enterprise Networking Planet and InternetNews.com. Follow him on Twitter @TechJournalist.