Wednesday, Internet applications and content delivery solutions provider, Akamai Technologies, Inc. (AKAM), recorded lower profit for the fourth quarter, hurt by higher expenses, despite a 12% increase in revenues. Akamai share dropped about 5% after the announcement of the results.
Cambridge, Massachusetts-based Akamai's net income for the fourth quarter declined to $40.1 million or $0.21 per share from $40.5 million or $0.22 per share in the prior year quarter.
Excluding utilization of tax NOLs and credits of $22.5 million fully-taxed normalized net income was $62.8 million or $ 0.34 per share for the current quarter. Normalized net income for the fourth quarter was $85.4 million or $0.46 per share.
On average, 21 analysts polled by Thomson Reuters expected the company to report profit of $0.43 per share for the quarter. Analysts' estimates typically exclude one-time items.
In the preceding third quarter, the company's net income slipped to $32.7 million from $33.4 million in the year-ago quarter. On a per share basis, earnings were flat with last year at $0.18. Excluding items, normalized net income decreased 5% to $70.8 million or $0.38 per share from $74.2 million or $0.40 per share a year earlier.
Revenue for the quarter under review was $238.3 million, a 12% increase from $212.6 million in the comparable quarter last year. Analysts had a consensus revenue estimate of $233.54 million for the fourth quarter.
In the preceding quarter revenue was $206.5 million, up 5% from $197.3 million in the year-ago quarter.
Commenting on the results Paul Sagan, president and CEO said," We were very pleased with how our business performed in 2009, capping a solid year with a return to double-digit revenue growth in the fourth quarter. For the year, we grew revenue, improved our cash gross margins, and generated over $400 million of cash from operations in a tough economic environment. We believe these results provide us with strong momentum coming into 2010, and position Akamai for the next wave of growth on the Internet."
For the current quarter, Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization, or EBITDA increased to $111.6 million from $100.3 million in the year-ago period.
Total cost and operating expenses increased to $176.1 million from $157.7 million a year ago. Operating income for the quarter was $62.2 million, up from $54.8 million in the same quarter last year.
The company noted that the number of customers under recurring service contracts at the end of the fourth quarter increased by 91 to a record 3,122, a 9% increase year-over-year.
During the fourth quarter of 2009, Akamai repurchased about 646 thousand shares of common stock for $15.1 million at an average price of $23.34 per share. For the full-year, the company repurchased about 3.3 million shares of common stock for $66.3 million at an average price of $19.93 per share. As of December 31,2009, the company had about 171.2 million shares of outstanding common stock.
Cash from operations for the full year was $424.4 million or 49% of revenue, up 24% over the prior year. Akamai had over $1 billion of cash, cash equivalents and marketable securities at the end of the year.
For the fiscal 2009, the company reported net income of $145.9 million or $0.78 per share, compared to $145.1 million or $0.79 per share last year. Normalized net income was $312 million or $1.67 per share and fully-taxed normalized net income, excluding utilization of tax NOLs and credits of $84.2 million, was $227.8 million or $1.22 per share.
Full year,revenue was $859.7 million, up from $790.9 million in the prior year.
Analyts expected earnings of $1.64 per share on revenue of $855.27 million for the full year.
AKAM closed Wednesday's regular trading at $26.50, up $0.13 or 0.49%, on a volume of 4.49 million shares on the Nasdaq. In after hours, shares dropped 4.60% or $1.22, trading at $25.28.
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