Juniper Sells Pulse, Sees Demand Softening in Q3

In their Q2 report yesterday after the markets closed, Juniper Networks posted pretty solid numbers. Unfortunately, the ones they forecast for Q3 were not up to expectations and the stock is down 6% in premarket trading.  Meanwhile they forged ahead with their streamlining plan with the sale of Junos Pulse.

Revenues of $1.23B were up 5% sequentially and inline with last quarter’s guidance and analyst expectations. Earnings per share of $0.40 were a couple pennies better than anticipated.

However for Q3 they expect revenues of $1.15-1.20B and earninge per share of $0.35-0.40, both ranges being below analyst projections. Juniper says that delays in closing deals with North American network operators is behind the weak forecasts, a condition that will persist through the end of the year. A piece of that is caution in advance of the various merger activities going on in the sector, e.g. Comcast/TWC, AT&T/DirecTV, and possibly Sprint/T-Mobile at some point. I’ll be curious to see if other vendors chime in with similar reports of second half demand softness.

Shaygan Kheradpir took over as CEO in the first quarter, and his arrival was soon followed by plans for a 6% headcount reduction and a streamlining of the company’s product portfolio. They followed through this morning with the announced divestment of Junos Pulse, which will be bought by Siris Capital for $250M or so. Pulse is their SSL VPN application suite.

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Categories: Financials · Mergers and Acquisitions · Telecom Equipment