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By | Paul Kunert 28th January 2015 16:35

Juniper in the red as product biz bleeds sales in 'challenging' Q4

CEO Rahim: 'we are moving with urgency'

Troubled tech plumber Juniper Networks ended 2014 on a low as it swung into loss, and reported declining product sales, with the security portfolio looking particularly unloved by customers.

The New York-listed maker of switches and routers last night reported sinking revenues of $1.1bn for calendar Q4, down 13.4 per cent year-on-year; hardware sales fell 17 per cent to $749m but services grew eight per cent to $308m.

Broken down by segment, routing fell 15 per cent to $523.1m, switching was down 12 per cent to $174.4m and security dropped a whopping 39 per cent to $96.5m.

Routing and security were hit by “weakness” in the large US carriers sector, with lower-than-expected enterprise demand dampening switching sales.

Operating expenses were reined in, down 14 per cent with less spent on R&D, sales and marketing, and admin, but it was an impairment of goodwill charge that reduced the profits to rubble, resulting in a net loss of $769.6m compared with a profit of $151.8m in the prior year’s period.

This is the first full quarter since CEO Rami Rahim came on board, replacing a predecessor who left under a cloud, and he talked up the “major strides” he believes the company made under his guidance.

He said on a conference call with analysts the company pushed through “initiatives” to “streamline” the business, and “reduced” cost structure in what proved to a “challenging revenue environment”.

“Rest assured we are moving with urgency,” Rahim added.

The recovery plan has also included naming Jonathan Davidson as head of Juniper’s development and innovation team and Rahim commented that he “oversaw a comprehensive review of the security components of our business”.

As The Channel revealed last December, Juniper has dumped a bunch of security gear, including the FireFly Host, WebApp Secure and DDoS Secure products, though customers will continue to receive support.

“In security, I acknowledge that it has under performed,” said the CEO, and “2015 will be a year of stabilising our security revenue. To win in security we are pivoting our strategy to build integrated solutions that focus our network resiliency and business continuity across cloud, data centre, branch, campus and service provider mobile infrastructure”.

For the year, Juniper tuned over $4.62bn versus $4.66bn in 2013, and reported a net loss of $343.3m versus a net profit of $439.8m. ®

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