Juniper Reveals Operating Plan; Announces Dividend, Stock Buyback

(RTTNews) - Computer networking gear maker Juniper Networks (JNPR) Thursday came out with an integrated operating plan to refocus on key innovations as demand for High-IQ Networks and best-in-class cloud environments gain momentum.

The company also committed to return at least $3 billion to shareholders over the next three years via share repurchases and dividends. The board has authorized $2 billion in share buyback to be executed through the end of the first quarter of 2015, including a soon-to-be-entered $1.2 billion accelerated repurchase program.

Juniper will also initiate a quarterly cash dividend of $0.10 per common share in the third quarter of 2014, with the expectation to increase the dividend over time.

Juniper's announcement comes as hedge fund Elliott Management, which owns a 6.2% stake in the company, has been pressing for a three-pronged shareholder value plan, comprising cost cuts, return of cash to shareholders and optimization of its product portfolio.

Detailing its new operating plan, Juniper said it has scrutinized its business to provide a more focused R&D and go-to-market program, to drive efficiencies and margins, and to aggressively return capital to shareholders.

The plan seeks to optimize Juniper's expertise across routing, switching, security, control and network management. The company believes these markets present strong potential for long-term growth.

Juniper said it will create a more focused, agile and execution-oriented company structure driven to deliver on its customers' imperatives for High-IQ Networks and cloud environments.

The company will coalesce its engineering talent, go-to-market teams and R&D around the new strategy, leading to streamlining of its operations and business portfolio.

Juniper said the plan will reduce costs drastically and prop up margins. The company expects to exit the first quarter of 2015 with annualized operating expense savings of $160 million from the fourth-quarter of 2013 level and achieve an operating margin of 25% for 2015 -- an approximate 580 basis point improvement from 2013.