October 29, 2012, 1:18 PM — What does Juniper need to do to turn its fortunes around?
Despite beating Wall Street estimates with last week's Q3 results, Juniper (NASDAQ: JNPR) indicated Q4 revenue would be flat to slightly up from Q4 2011 and earnings would be down 20% to 30%, citing "challenging" market conditions marked by softness in the Americas.
The company is also in the midst of a restructuring that's seen four top executives depart, 500 employees laid off, consolidation in some business units and an effort to streamline product lines and R&D investments -- like the decision to kill its own application delivery controllers and recommend Riverbed's. This operational reboot is the result of product misfires, like disappointing sales in data center switching and security, and the slow ramp in new service provider routing gear.
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So here are five things Juniper needs to do in order to run its fortunes around and spark sustainable growth:
" Execute better across the board -- The hallmarks of a struggling company are all there, as mentioned above, from the top executives departing to the layoffs to the overlapping products. What's more, reports have surfaced that Juniper may be looking for a buyer (though EMC has quashed rumors it is looking to buy Juniper). Said Technology Business Research senior analyst Scott Denehy: "Despite the growth quarter, Juniper's long term prospects remain uncertain. Revenue growth for 4Q12 is estimated to be flat, and the company's financial performance will continue to be tied very closely to service provider spending patterns, particularly in the IP edge/core network as Juniper has yet to make any meaningful progress in the 4G Evolved Packet Core (EPC). While Juniper did announce that its solution for the EPC, MobileNext, is running production traffic with one customer, the company may be too far behind to compete effectively and have its solution contribute significantly to its long term growth."
Juniper has an execution problem. The company needs to improve engagement in all strategic areas. That begins with ...