Internet applications and content delivery solutions provider Akamai Technologies Inc. (AKAM), Wednesday reported a 2% drop in profit for the third quarter, reflecting higher expenses, notwithstanding a 5% growth in revenues. Nevertheless, both earnings and revenue for the quarter came in ahead of analysts' consensus.
Paul Sagan, President and Chief Executive Officer, Akamai said, "We are pleased with Akamai's solid performance in the third quarter, with both promising signs of growth in high quality video online and continued strong demand for our value-added solutions."
The Cambridge, Massachusetts-based company's net income for the third quarter 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 stock-based compensation expenses, acquisition-related costs and other items, normalized net income for the quarter decreased 5% to $70.8 million or $0.38 per share from $74.2 million or $0.40 per share a year earlier.
On average, 21 analysts polled by Thomson Reuters expected the company to earn $0.35 per share for the quarter. Analysts' estimates typically exclude one-time charges and gains.
In the preceding second quarter, Akamai reported a net income of $36.0 million, up 5% from $34.3 million in the prior year quarter. Earnings per share remained flat at $0.19. Excluding items, normalized net income dropped 2% to $75.3 million or $0.40 per share from $76.5 million or $0.41 per share in the year-ago quarter.
Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization, or EBITDA, for the quarter was $95.9 million, compared to $90.5 million in the third quarter 2008.
Revenue for the third quarter was $206.5 million, up 5% from $197.3 million in the year-ago quarter. Street analysts' had a consensus revenue estimate of $199.40 million for the quarter.
For the preceding second quarter, revenues increased 5% to $204.6 million from $194.0 million in the same quarter of last year.
Total costs and operating expenses for the recent third quarter was $155.7 million, compared to $145.6 million in the same quarter last year. Operating income declined to $50.7 million from $51.8 million in the corresponding period last year.
The company said that the number of customers under recurring contracts at the end of the third quarter increased 8% year-over-year to 3,031. Sales through resellers and sales outside the United States accounted for 19% and 28%, respectively, of revenue for the quarter.
Akamai's cash from operations for the quarter was $105 million. At the end of the third quarter of 2009, the company had nearly $973 million in cash, cash equivalents and marketable securities.
During the third quarter of 2009, the company repurchased around 2 million shares of common stock for $36.2 million at an average price of $18.41 per share, and had about 171.2 million shares of common stock outstanding as at September 30, 2009.
For the nine-month period, net income rose to $105.8 million or $0.57 per share from $104.6 million or $0.56 per share in the same period last year. Excluding items, normalized net income for the quarter edged up to $226.6 million from $226.3 million a year earlier. On a per share basis, earnings were flat with last year at $1.21.
Among others in the industry, Broomfield, Colorado-based Level 3 Communications Inc. (LVLT), today reported a wider net loss for the third quarter of fiscal 2009, hurt by a sharp decline in revenues at its communications segment. The company's third quarter net loss widened to $170 million or $0.10 per share from a net loss of $129 million or $0.08 per share last year. Quarterly revenue tumbled to $916 million from $1.07 billion in the year-ago quarter.
AKAM closed Wednesday's trading at $20.16, down $0.80 or 3.82%, on a volume of 6.21 million shares on the Nasdaq. In after hours, the stock gained $0.84 or 4.17%, trading at $21.00. In the past 52 weeks, the stock trended in a broad range of $9.25 - $23.58, with a three-month average volume of 4.00 million shares.
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