Reuters: Global Markets: F5 second-quarter beats, company reaffirms FY revenue target

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F5 second-quarter beats, company reaffirms FY revenue target Apr 18th 2012, 22:57 Wed Apr 18, 2012 6:57pm EDT (Reuters) - F5 Networks Inc (FFIV.O) posted second-quarter results above market expectations and forecast a muted third quarter, leading to a fall in shares, but the stock recovered after the company reaffirmed its full-year growth target. The network gear maker's shares, which fell 4 percent immediately after F5 announced its results, reversed course after the company allayed fears of a slow down in its business. It said it was on track to achieve its 20-percent revenue growth target for the full year and expects the financial segment to offset any revenue shortfall from a decelerating telecom business in the third quarter. F5 Networks shares rose 7 percent over their Wednesday close in extended trading, after the management made the comments on a call with analysts. F5's revenue has grown in the double-digits for more than two years as service providers scrambled to manage an exponential increase in data traffic caused by the addition of millions of smartphone and tablet users on their networks. The company's Viprion 2400 and 4400 products, which manage secure delivery of data over networks, have been adopted well by telecom customers who are upgrading to 4G technology and rolling out Internet Protocol-based networks. Chief Financial Officer Andy Reinland said he expected growth in the carrier business to slow in the current quarter, but believes other segments will compensate. "Telco was very high (in the second quarter) ... we expect that to be down somewhat in the coming quarter," he said on the call. The telecom segment contributed 27 percent of the total revenue in the second quarter, an increase of 8 percentage points over last year. Financials were second, at 16 percent. Reinland also said that the recently acquired Traffix Systems business would make no material impact on revenue in the third quarter. However, the deal pipeline is strong and sales from security related products will increase as more and more clients begin providing their services over the internet, the company said. It forecast third-quarter earnings to be between $1.12 and $1.14 per share, at the lower end of analysts' expectations. Third-quarter revenue is expected to be in the range of $350 million to $355 million, broadly in line with Wall Street estimates. SECOND QUARTER BEATS EXPECTATIONS The company's net income in the second quarter rose to $68.6 million, or 86 cents a share, from $55.6 million, or 68 cents a share, a year ago. Excluding items, F5 earned $1.09 a share, beating Wall Street estimates of $1.07 per share. Revenue rose 22.4 percent to $339.6 million, topping analysts' forecasts of $335.3 million. The company's shares closed at $124.21 on Wednesday on the Nasdaq. (Reporting by Siddharth Cavale in Bangalore; Editing by Sreejiraj Eluvangal) Link this Share this Digg this Email Reprints

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