Juniper hits Q3 targets, lands Cisco switching director

Four key product transitions crimping growth; Scheibe will focus on strategic alliances

Juniper met expectations for its third quarter earnings, but the company still faces challenges in the current fourth quarter and into early 2012. Juniper is waiting for four key product developments to ramp before reaching the revenue growth levels - 20% per year - it expects and is accustomed to.

On the horizon are Juniper's T4000 core router, MobileNext enhanced packet core and PTX packet transport platforms for service providers, and QFabric switches for data centers and cloud computing environments. These are new product transitions for Juniper and are expected to ramp in 2012.

Juniper recorded Q3 revenue of $1.1 billion and earnings of $0.28 per share. Revenue was up 9% from a year ago, but down 1% from Q2. Earnings, though, were down 13% form a year ago and 10% from Q2.

Sales of the MX Ethernet routers were down 18% in the quarter from Q2, yet Juniper saw double digit sequential growth in both its SRX firewalls - almost 50% -- and Service Layer Technologies business, which is comprised of the security products, plus other enterprise focused technologies.

The Infrastructure Products group - responsible for service provider routers -- saw a 6% decline in revenue from Q2. Enterprise switching grew 5.2% from Q2.

But analysts expect year-over-year growth for Juniper to linger in the single digits until those new products ramp in the second half of 2012. Investment firm UBS expects full year growth for 2011 and 2012 to be about 10.5% vs. its previous estimates of 12% for 2011 and 15% for 2012. 

Prior to these product transitions taking hold, Juniper had its sights set on 20% annual growth.

Despite these challenges, Juniper landed a Cisco Ethernet switching executive recently. Thomas Scheibe, who was director of data center switching and services at Cisco, joined Juniper three weeks ago as senior director of strategic alliances.

Scheibe had been with Cisco since 1998. He was visible at trade shows discussing Cisco's data center switching and fabric strategies.

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