Networking equipment company Juniper Networks just reported first-quarter revenue that was slightly better than expected and profits that were in line with the projections of analysts. Its shares rose slightly in after-hours trading after rising nearly two percent during the regular session.
Revenue grew 10 percent year on year to reach $1.17 billion, which beat the consensus view of analysts. Profits on a per-share basis were 29 cents, in line with the consensus.
For the quarter ahead, Juniper said it expects revenue of $1.2 billion to $1.23 billion and profit of between 36 cents and 39 cents per share.
I had a quick conversation with CEO Shaygan Kheradpir, who told me that as more companies move to embrace different aspects of cloud computing — whether it’s building their own clouds or delivering their software as a service — it boosts their need for smarter networking equipment. “Every month we see more things delivered as a service than in the month before. They have to be delivered by a giant cloud ecosystem, and that fits very nicely with what we do,” he said.
Kheradpir took over as CEO in January. About two weeks after he started, Juniper was targeted by Elliott Management, an activist hedge fund led by billionaire Paul Singer, which bought up about six percent of its shares and started calling for changes. It now owns about 7.4 percent.
Juniper responded with a new operating plan that included initiatives that were similar in some ways to the changes that Elliot wanted, and they reached a deal to avoid a proxy fight. Juniper also announced plans to cut 570 employees, or about six percent of its workforce, as a cost-reduction measure. It has also agreed to about $3 billion in combined dividends and share buybacks. It exited the quarter with about $3.5 billion in cash and investments, down from $4.1 billion in December.