Juniper is to offload its Junos Pulse mobile security business as part of a wide-ranging restructure
The company made the announcement during the earnings call for its second quarter financial results.
For the period ending 30 June, Juniper posted a net profit of $221.1m (£130m), or $0.46 (£0.27) per diluted share, compared to $97.9m (£58m) in the same year ago period. Revenues meanwhile rose 7 percent to $1.23bn (£724m) from $864m (£509m) a year earlier.
“Juniper delivered another solid quarter of revenue growth, with continued diversification across our target verticals,” said CEO Shaygan Kheradpir. “We are relentlessly executing on our Integrated Operating Plan and successfully implemented several initiatives to drive greater efficiencies across our organisation.”
And then during the conference call, Kheradpir revealed that it is selling its Junos Pulse mobile security business to a private equity firm (Siris Capital) for $250 million (£147m). The sell off had been widely expected, as the company was said to mulling a sale of the unit back in April, as part of its larger effort to streamline the company.
Back in February this year, Kheradpir outlined his plan to restructure the company’s operations and return $3 billion (£1.8bn) to investors. The company also revealed this year it was cutting 6 percent of its workforce (or 560 jobs) and exiting the application delivery controller business.
Juniper is a profitable outfit, but it is cutting jobs and selling off parts of its business, because of pressure year from a couple of large shareholders, including Elliott Management. These “activist investors” want the company to cut expenses and return more money to shareholders.
Evidence of this pressure emerged in July 2013, when it was unexpectedly announced that then CEO Kevin Johnson would retire, despite stellar results at the networking company.
Shareholders believed that the company had solid products but was underperforming, and urged management to improve the situation. This included reviewing its switch and router strategies to reduce expenses, and slowing its acquisition strategy. The firm also suggested that Juniper ditch its security business.
Thus when Kheradpir was announced as the new CEO in November last year to replace Johnson, he had a clear remit from shareholders to undertake some wide-ranging changes at the company.
Instead, Juniper wants to focus on the cloud and ‘high-IQ networks’, for which security is an essential element.
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