Juniper Networks 2Q profit soars, CEO to retire

AP News
Posted: Jul 23, 2013 5:29 PM

SUNNYVALE, Calif. (AP) — Juniper Networks Inc. said Tuesday that its second-quarter profit jumped 70 percent, beating Wall Street expectations, and that its CEO will retire once a successor is found.

The networking equipment company said demand was strong in key markets and there were signs of improvement in the network-security business. The company gave an upbeat forecast for the July-through-September period.

Juniper also said its board approved up to $1 billion more for buying back stock, which can support earnings per share.

Separately, the company said that Kevin Johnson, the CEO for the past five years, will retire once a replacement is named.

In a statement issued by Juniper Networks, Johnson, 52, said the company was entering "a fresh cycle of customer investments" for cloud computing and the mobile Internet, making this "a good time to transition to new leadership and drive the next phase of Juniper's growth." His retirement was a "personal decision," the company said in a separate emailed statement.

Johnson was paid a $1 million salary and total compensation — including stock and options — valued at $6.9 million in 2012. That was down from compensation estimated to be worth $10.7 million in 2011.

Johnson spent 16 years at Microsoft Corp., ending up as president of its platforms and services division, before Juniper hired him as CEO in 2008. He is on the board of Starbucks Corp. as well.

Juniper said its board hired executive search firm Heidrick and Struggles to help find a new CEO.

Juniper's shares rose 59 cents, or 2.8 percent, to close at $21.34 in regular trading before the third-quarter results and CEO's departure were announced. In after-hours trading, the stock lost 4 cents to $21.30. The stock is up 8.5 percent this year.

Net income was $97.9 million, or 19 cents per share, in the April-June period. Juniper said that excluding special items, it would have earned 29 cents per share. Revenue rose 7 percent to $1.15 billion.

Analysts surveyed by FactSet had expected earnings excluding items of 25 cents per share on revenue of $1.09 billion.

The company earned net income of $57.7 million, or 11 cents per share, on revenue of $1.07 billion in last year's second quarter.

Juniper said third-quarter results would be helped by continuing strong demand for its routers and switching gear and that it expects the security business to stabilize.

The Sunnyvale, Calif., company forecast third-quarter earnings between 29 cents and 32 cents per share, excluding one-time items, on revenue of $1.14 billion to $1.18 billion. The midpoint of the guidance was higher than analysts' estimates of 29 cents per share and $1.14 billion revenue.