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Juniper Networks plans more cost reductions on weak demand

2014-10-24 08:29:00| Telecompaper Headlines

(Telecompaper) Juniper Networks announced plans for additional cost reductions after lower-than-expected results in Q3. Amid falling demand from service providers, the company's quarterly revenues decreased 5 percent year-over-year and 8 percent sequentially to USD 1.126 billion. The operating margin improved to 15.3 percent from 12.2 a year ago, helped by a USD 15 million benefit from restructuring and other charges. Net profit also benefited from the one-time items, rising to USD 103.6 million from USD 99.1 million a year ago. Adjusted EPS of USD 0.36 was up 9 percent year-on-year and fell 10 percent compared to the second quarter of 2014. CEO Shaygan Kheradpir said the company was disappointed with the results, which reflect weaker demand particularly in the US. The company announced additional cost reductions of USD 100 million, and increased its total annualized commitment to USD 260 million, designed to lower operating expenses while improving profitability and long-term growth. The cost reductions will include a "careful management of headcount, focus on improved efficiencies and prioritization of revenue-generating projects", Juniper said. Looking ahead, the group expects the revenue environment to be "challenging". It forecast fourth-quarter revenues of USD 1.025-1.075 billion, an adjusted operating margin around 18.5 percent and adjusted EPS of USD 0.28-0.32.

Tags: cost plans networks demand

Category:Telecommunications

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