Shares of F5 Networks Inc. (FFIV: Quote) plunged eleven percent in after hours trade on Wednesday, after reporting a fourth-quarter profit and sales that missed analysts' estimates, hurt mainly by slowing revenue growth. The network equipment maker has also forecast its first-quarter profit and sales to come in below current Street expectations.
Nevertheless, Seattle, Washington-based F5 Networks fourth-quarter profit inched up from last year, on a double-digit revenue growth.
Chief Executive John McAdam said, "But after a strong first half, revenue growth slowed in the second half of the year. Beginning in the third quarter and continuing through Q4, slowing growth in product revenue reflected smaller deal sizes, particularly among large U.S. enterprise and telecommunications customers."
F5 Networks revenue for the quarter grew 15 percent to $362.6 million, but was below analysts estimate of $365.87 million. Revenue growth slowed when compared to previous quarters. Revenue growth for previous quarter was 21.3 percent, while it increased 22.4 percent and 19.9 percent in second and first quarter, respectively.
F5 Networks fourth-quarter profit improved to $67.7 million or $0.85 per share from $67.6 million or $0.84 per share last year. Adjusted earnings rose to $1.12 per share from $1.06 per share last year. On average, 39 analysts polled by Thomson Reuters expected earnings of $1.18 per share for the quarter. Analysts' estimates typically excludes special items.
Total operating costs for the quarter were $188.0 million, up from $159.4 million last year.
Moving forward to the next fiscal year, McAdam said, "As we enter fiscal 2013, it is difficult to predict what turns the economy will take." McAdam also said that the ongoing economic conditions and the expected normal seasonality in the first quarter has tempered the company's near-term outlook.
For the first quarter, F5 Networks expect earnings of $0.86 to $0.88 per share, adjusted earnings of $1.14 to $1.16 per share, and revenues of $363 million to $370 million. Analysts currently estimate earnings of $1.20 per share on revenues of $373.50 million.
F5 Networks is a Application Delivery Networking company aiding enterprises and service providers to optimize on virtualization, cloud computing, and on-demand IT. It offers products in various segments of the Application Delivery Controller market.
FISV closed Wednesday's trading at $93.32, down $2.22 or 2.32%, on a volume of 3.6 million shares on the Nasdaq. In after hours, the stock further lost $10.34 or 11.08%.
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by RTT Staff Writer
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