F5 Networks Inc. (FFIV: Quote), Wednesday reported a drop in profit for the second quarter, as revenues declined reflecting a slowdown in North America. Earnings for the quarter were in line with estimates, but revenues fell short of expectations.
Service provider revenues came in significantly below the company's expectations. Customters of F5 Networks, which makes data-management equipments, are mainly technology and telecommunications companies.
Commenting on lower service revenues, Chief Executive John McAdam, observed, "We believe this was primarily due to project delays, which caused customers to postpone orders that we had expected to close during the quarter. The weakness in sales to service providers was especially pronounced in North America."
Revenue for the quarter declined 2 percent to $350.2 million from $365.5 million last year. Thirty-four analysts had a consensus revenue estimate of $351.77 million for the quarter.
Seattle, Washington-based F5 Networks second-quarter profit dropped to $63.4 million or $0.80 per share from $68.6 million or $0.86 per share last year.
Excluding one-time items, earnings declined to $1.07 per share from $1.09 per share last year. Thirty-four analysts polled by Thomson Reuters expected earnings of $1.07 per share for the quarter. Analysts' estimates typically exclude special items.
In spite of continuing weakness in the global economy, McAdam said he believes the growing pipeline for the company's new products and strong demand for its security solutions will have a positive impact on product sales throughout the remainder of fiscal year 2013.
Looking forward to the third quarter, the company expects earnings of $0.80 to $0.83 per share, adjusted earnings of $1.06 to $1.09 per share, and revenues of $355 million to $365 million. Analysts currently expect earnings of $1.12 per share on revenues of $369.65 million for the quarter.
The company authorized an additional $200 million to its share repurchase program, which is incremental to the $81.3 million currently in the existing program.
FFIV closed Wednesday's regular trade at $72.35, up $0.02 or 0.03%, on the Nasdaq. The stock further gained $0.65 or 0.90% in after-hours trade.
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by RTT Staff Writer
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