Juniper reports revenue decline for Q3 2014
Vendor cites lower-than-anticipated demand from service providers as reason for slowdown
In preliminary financial results released over the weekend, Juniper Networks reported net revenue of $1.126bn for the third quarter of 2014, a 5% decline on the year-ago quarter and an 8% decline from Q2 2014.
The vendor reported that its operating margin for the third quarter increased to 15.3% on a GAAP basis, including a $15m benefit from restructuring and other charges, from 9.4% in the second quarter of the year. However, non-GAAP operating margin for Q3 2014 decreased to 21.5% from 22.3% in the second quarter of 2014.
Shaygan Kheradpir, CEO of Juniper, said that the results were disappointing, though he maintained that the vendor's long-term business was still in good shape.
"We are disappointed in our third quarter revenue results, which reflect a lower-than-anticipated demand from service providers, particularly in the US," he said.
"However, the underlying long-term demand trends in networking remain intact. While we navigate these dynamics, we are relentlessly focused on managing operating expenses while providing the innovation that matters most to our customers. We continue to have confidence in our business and see substantial opportunities to drive profitable growth and increase the value of our shareholders' investment over the long-term."
Robyn Denholm, CFO at Juniper, added that despite the weaker spending environment in the third quarter of the year, the vendor was able to manage its costs effectively and deliver good margins.
"We enhanced efficiencies across the company and exceeded our targeted cost reductions ahead of schedule," he said. "We have also continued our aggressive capital return plan to return immediate value to our shareholders while investing for the future growth of our business."
Other financial highlights from Juniper's third quarter included the fact that total cash, cash equivalents, and investments as of September 30 were $3.321bn, compared to $3.96bn as of June 30, 2014, and $4.034bn as of September 30, 2013.
The company said that it sees the long-term demand drivers as healthy and is confident in its innovation pipeline. However, the vendor admitted that it is planning for the overall revenue environment to be challenging and therefore is taking a cautious stance on revenue over the next several quarters.