Juniper offers cost cuts, dividend after Elliott pressure

News Broadband Global 21 FEB 2014
Juniper offers cost cuts, dividend after Elliott pressure
Juniper Networks announced plans for significant cost reductions and a major return of capital to shareholders. The company targets a reduction of USD 160 million in operating costs by Q1 2015 compared to Q4 2013, helping it achieve a 25 percent operating margin in 2015. This is an improvement of 580 basis points from 2013. CEO Shaygan Kheradpir will lead a Cost Control Committee, and Juniper hired McKinsey to help with the restructuring. 

Juniper also committed to return a minimum USD 3 billion to shareholders over the next three years through a combination of share repurchases and dividends. This will include up to USD 2 billion in shares repurchased by Q1 2015, of which USD 1.2 billion under an accelerated buyback starting soon. Juniper will also initiate a quarterly cash dividend of USD 0.10 per share beginning in the third quarter of 2014, with the expectation to increase the dividend over time. The shareholder remuneration will be funded by a combination of existing cash and newly issued debt. 

Finally, the company announced the appointment of Kevin DeNuccio, a former Cisco executive, and Gary Daichendt, the former CEO of Redback Networks, as new independent directors. Juniper's own former CEO Kevin Johnson will retire from the board at the end of February. 

The new strategy follows a review by the company's new CEO as well as pressure from shareholders. Jesse Cohn, portfolio manager at shareholder Elliott Management, welcomed the changes, saying it was "an incredibly positive development". 

Categories:

Fixed

Companies:

Juniper Networks,  Redback Networks,  Cisco

Regions:

Global

Tags:

Network equipment, Finance, Corporate strategy

Related Articles

GLOBAL 23 APR 2014

Juniper Networks Q1 sales up 10%, margins improve

Juniper Networks said its first-quarter net revenues rose 10 percent year-on-year to USD 1.170 billion, slightly better than expected. The operating margin declined to a negative 0.5 percent, due to USD 122 million of restructuring and other charges, from 8.2 percent the previous year. Excluding the one-time items, the operating margin rose to 17.2 percent from 15.7 percent. Net profit still improved to USD 110.6 million or USD 0.22 per diluted share, from USD 91.0 or 18 cents a share a year earlier, thanks

GLOBAL 23 APR 2014

Juniper Networks realiseert tien procent meer omzet

Juniper Networks heeft over het eerste kwartaal van dit jaar een omzet gerealiseerd van bijna 1,2 miljard dollar, een stijging  van tien procent op jaarbasis. Op kwartaalbasis daalde de groei echter, met acht procent. De nettowinst steeg ten opzichte van vorig jaar met 22 procent naar ruim 110 miljoen dollar. De operationele marge bedroeg in het kwartaal 17,2 procent (non-GAAP). Voor Q2 2014 verwacht Juniper Networks een omzet van zo'n 1,2 miljard bij een operationele marge van 21 procent. 

GLOBAL 3 APR 2014

Juniper Networks to cut 6% of global workforce

Juniper Networks announced further details of its planned restructuring, including a 6 percent reduction in its workforce. In a SEC filing, the company said the "integrated operating plan", or IOP, is aimed at focusing Juniper on high-growth segments and right-sizing certain functions. The majority of the headcount reductions are immediate, and a significant proportion are middle management positions. The company estimates cash severance costs at around USD 35 million in the first quarter of fiscal 2014. To

GLOBAL 20 FEB 2014

Nokia eyes Juniper to expand networks business - report

Nokia is considering buying Juniper Networks to expand its Nokia Solutions and Networks (NSN) division, reports Germany's 'Manager magazin' citing unnamed sources. NSN CEO Rajeev Suri is understood to have travelled to the US at end-2013 to discuss a closer partnership and possible merger with Juniper's management. The company earlier considered pursuing a link-up with Alcatel-Lucent, but abandoned the plans. NSN will become Nokia's main business following the sale of its handset activities to Microsoft. 

GLOBAL 20 FEB 2014

Cisco leads SR market, Alcatel, Juniper gain share

Cisco Systems remains the dominant vendor of service provider routers, but lost market share to Alcatel-Lucent and Juniper Networks last year. According to Synergy Research, Cisco had a 47 percent share of the market over the full year 2013, but its share gradually eroded through the year, from 49 percent in Q1 to 44 percent in Q4. For the full year, Alcatel-Lucent was the second ranked vendor with an 18 percent market share, followed by Juniper with 17 percent. In Q4 total service provider router revenues

GLOBAL 24 JAN 2014

Juniper revenues increase 12% in Q4

Juniper Networks reported preliminary fourth-quarter revenues of USD 1.274 billion, a year-over-year increase of 12 percent and slightly better than its guidance of USD 1.20-1.23 billion. The company's operating margin increased to 15.3 percent from 11.5 percent, and the adjusted operating margin rose to 21.9 percent from 18.2 percent. Net income was USD 151.8 million or USD 0.30 per diluted share, up from USD 95.7 million or USD 0.19 per share a year earlier. The result includes 4 cents a share in charges

GLOBAL 14 JAN 2014

Juniper Networks shareholder calls for new strategy

Juniper Networks has a new activist shareholder, who has called on the company to cut costs and return more cash to shareholders. Elliott Associates reported a 6.2 percent stake in the network equipment maker and filed a presentation with the SEC on how it would like to see things change at Juniper. Elliott said the company's shares have underperformed, due to an "outsized cost structure, inefficient capital structure, poor M&A track record and execution issues caused by unsuccessful extensions into securit

GLOBAL 17 DEC 2013

Juniper Networks to acquire Wandl

Juniper Networks entered into a definitive agreement to acquire Wandl, a provider of software products for advanced planning, management, design and optimisation of next-generation multi-layer networks. Under the terms of the agreement, Juniper Networks plans to acquire Wandl for a purchase price of approximately USD 60 million. The Wandl team will continue to be headquartered in New Jersey, joining forces with Juniper Networks OpenLab, The Junos Center for Innovation, to further accelerate new network-inte

Just In

16:42

SLT-Mobitel launches 5G network in Sri Lanka

16:19

Dialog Axiata launches 5G network, connects 1.5 million subscribers

15:56

UK govt to ban AI-enabled nudification apps to protect women, girls

15:42

3 UK launches last-minute Christmas sale

Commentary

13:56

Video market set for slower growth ahead

11:38

Netflix buys Warner Bros to deepen content catalogue

11:11

KPN's mixed performance in Q3 raises questions for strategy day

15:26

Stock markets breaking records but what happened to Odido's IPO plans?

Background

01:04

The week in telecom: Wi-Fi bolt-ons take off to boost broadband growth, video market works on consolidation

01:39

The week in telecom: Netflix wins bidding for Warner Bros, Apple poaches new execs, Samsung debuts trifold

13:51

Proximus vs. Telenet: Proximus performs better in Q3 while Telenet uses up cash

14:16

Proximus Domestic still struggling with low margins

Complete profile

Before downloading the whitepaper, we would like to ask you to complete your profile with company and position. After confirming you will receive the white paper.