F5 shares fall after hours on weak 4Q and forecast
SEATTLE (AP) — F5 Networks Inc.'s shares slid after the company's fiscal fourth-quarter results and first-quarter forecast fell short of market expectations as the weak economy affects corporate customers' technology spending.
Based in Seattle, F5 provides corporate networking equipment and services to a wide range of businesses. It said Wednesday that it was landing smaller deals with some of its U.S. customers, slowing revenue growth in the U.S.
In the July-September quarter, F5 earned $67.7 million, or 85 cents per share, almost unchanged from net income a year ago of $67.6 million, or 84 cents per share. The company said a higher tax rate also weighed on profit.
After excluding the impact of stock-based compensation and an adjustment for the value of some of its assets, the company earned $1.12 per share, compared with $1.06 last year.
Revenue increased 15 percent to $362.6 million from $314.6 million.
Analysts polled by FactSet had expected the company to earn $1.18 per share on revenue of $366.1 million.
F5 CEO John McAdam said that it is difficult to predict what turns the economy will take in the coming year, but the company believes that changes in technology will increase demand for some of its newer products. Still, the state of the global economy has tempered the company's outlook, he said. Many technology providers are saying that their customers are more cautious with their spending because of economic uncertainty.
For the current quarter, which ends in December, F5 expects adjusted profit of $1.14 to $1.16 per share on revenue of $363 million to $370 million. Analysts expected more: Profit of $1.20 cents per share on revenue of $373.7 million.
For the fiscal year that ended in September, F5 earned $275.2 million, or $3.45 per share, up from $241.4 million, or $2.96 per share, the year before. Revenue rose to $1.38 billion from $1.15 billion.
Shares plunged $10.07, nearly 11 percent, to $83.25 in after-hours trading. Its stock fell $2.22 to close regular trading at $93.32. Shares are down 12 percent this year.