Akamai Technologies (AKAM) late Monday served up a beat-and-raise quarter, sending shares up in the internet infrastructure provider.
XAkamai said first-quarter adjusted earnings were 79 cents a share, up 22% from a year ago. Revenue rose 11% to $669 million, topping consensus estimates. Analysts expected Akamai to report earnings of 70 cents on sales of $654 million for the period ended March 31.
Akamai guided to June quarter earnings of 81 cents a share vs. consensus estimates of 70 cents. The company said it expects revenue of $664 million. Analysts had modeled $657 million.
Shares fell 1.1% to close at 70.84 on the stock market today.
Akamai is the biggest provider of content delivery network, or CDN, services. They increase the speed of e-commerce transactions, business software downloads and video streaming to mobile devices. With prices for CDN services continuing to fall, Akamai has expanded into higher-margin security products.
Oppenheimer on Tuesday raised its price target to 90 from 80.
"Security should drive growth as Akamai benefits from its unique, edge-based infrastructure, which is difficult for competitors to replicate," said Tim Horan, an Oppenheimer analyst in a report. "Akamai's network excels at real-time, cloud-based multi-user gaming, which is in the early days of adoption."
Top Media Customers
Akamai's top media customers — Microsoft (MSFT), Google, Facebook (FB), Apple (AAPL), Amazon.com (AMZN), and Netflix (NFLX) — accounted for 7% of revenue, down from 8% in the December quarter.
"We were pleased to see media traffic growth accelerate in the fourth quarter, consistent with the trend we saw in the third quarter and demonstrating continued traction from the traffic-focused initiatives we initiated in the middle of last year," Adam Karon, Akamai's media division general manager, said in a press release.
Akamai in March increased its stock buyback plan after activist investor Elliott Management took a stake in the company.
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The post Akamai Earnings Beat, Guidance Above Views On Security, Gaming Growth appeared first on Investor's Business Daily.
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