) is contemplating the sale of its mobile security unit Junos
Pulse. According to Reuters, the networking solutions provider
has also hired an investment bank,
), to look for prospective buyers.
Junos Pulse - part of Juniper's Software Solutions Division
(SSD) - offers a wide range of mobile security solutions and
products to enterprises. It is noteworthy that dismal performance
of the security segment (down 16% year over year) led to the
overall decline in SSD sales (down 9% year over year) in fiscal
The current move appears to be in sync with Juniper's efforts
to realign its business plans due to pressure from Elliot
Management Corp. and Jana Partners LLC to cut expenses and
increase cash payouts to shareholders.
As part of the restructuring plan, the company recently
announced the downsizing of its workforce by approximately 6% and
increased focus on the high-margin routing, switching, security,
control and network management businesses.
Though workforce reduction and possible sale of the Junos
Pulse segment would impact the top line and put a burden on the
operating results in the near term, these would help the company
to focus on its core operations, in our view.
While the company's new products, cost reduction initiatives
and improving execution remain the growth catalysts, increasing
F5 Networks Inc.
), uncertain economic conditions and constricted federal spending
are the possible headwinds.
Nonetheless, we believe that increased spending by service
providers should support Juniper's near-term fundamentals. The
company's expansion into the software defined network segment is
expected to strengthen its position in the networking space.
Currently, Juniper has a Zacks Rank #1 (Strong Buy).
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