Boston, MA 08/27/2014 (wallstreetpr) – Juniper Networks, Inc. (NYSE:JNPR) requires some energy – a lot of it as a matter of fact. The company faces challenges in improving revenue at a time when competition and consolidation in the telecom industry are having an impact on its revenue and the bottom line as well. That is why the company has adopted an ambitious cost-saving plan.
Cost-saving plan
Under what it calls integrated operating plan (IOP), Juniper focuses on various opportunities to improve performance, especially the bottom line even when revenue growth remains a challenge. In connection with the IOP, the company is seeking to improve operational efficiencies and optimize structures. As such, it expects to achieve annualized operating cost-savings of $160 million, that target is expected to be achieved by the end of 1Q2015. In addition to pushing aggressively towards efficient operations, the company is keen on boosting revenue, especially through cloud offering.
Through cost-savings, Juniper Networks, Inc. (NYSE:JNPR) will not only be able to improve its bottom line, but also reclaim more cash that can be returned to the shareholders. Perhaps that explains why the company committed to returning at least $3 billion to the shareholder in the next three years. That will be achieved through a combination of dividends and shares repurchase. Under the accelerated shares repurchase programs (ASR), Juniper initiated $1.2 billion repurchase during 1Q2014, where it also declared $0.10 a share in cash dividend.
Shareholder goodwill
With happy shareholders taking home dividends and benefiting from shares repurchase, Juniper Networks, Inc. (NYSE:JNPR) expects to get support for its other turnaround programs that include divestment of non-core assets. The company agreed to sale Junos Pulse, its mobile security business, for about $250 million to Siri Capital. The management cited that the sale of the business was in line with their IOP.
Juniper Networks, Inc. (NYSE:JNPR) reported revenue in 2Q increased 7% to $1.23 billion. It now expects revenue in the band of $1.15-$1.2 billion in 3Q2014.
