F5 Networks Rises After Forecast Tops Predictions: Seattle Mover
January 19, 2012, 8:32 PM ESTBy Jordan Robertson
Jan. 19 (Bloomberg) -- F5 Networks Inc., a maker of equipment for managing data traffic, posted its biggest one-day gain since October after the company’s profit and sales forecasts beat analysts’ estimates.
Second-quarter earnings will be $1.05 to $1.07 a share, excluding some items, the Seattle-based company said yesterday. Sales will be $332 million to $337 million in the period, which ends March 31. Analysts had estimated $1.05 in profit and $330.9 million in revenue, according to data compiled by Bloomberg.
F5’s so-called application-delivery controllers go into data centers to prevent Internet gridlock and enhance security. The company’s hardware products are withstanding a challenge from server software, which attempts to provide similar features, said Matthew Robison, an analyst at Wunderlich Securities Inc. The company showed it can improve profit margins despite the increased competition, he said.
“Peers may be getting traction with software/server-based application delivery controllers, but for the traditional customer base of F5, purpose-built hardware continues to deliver,” Robison said in a report. He now expects F5 shares to reach $120, up from a previous target of $110. Robison maintained his “hold” rating.
F5 shares jumped 12 percent to $121.83 at 12:59 p.m. in New York, the biggest gain since Oct. 26. The stock, which had fallen 18 percent last year, climbed as high as $122.63 earlier in today’s session.
Annual Sales
Demand for its equipment will help fuel sales growth of at least 20 percent this year, F5 said yesterday, reiterating an earlier forecast. The company plans to hire more than 125 workers in the current quarter.
F5’s fiscal first-quarter earnings also beat estimates. Net income in the three months ended Dec. 31 rose 19 percent to $66.5 million, or 83 cents a share, from $55.7 million, or 68 cents, a year earlier.
Excluding some items, Earnings were $1.03 a share. Sales rose almost 20 percent to $322.4 million. Analysts had estimated profit of $1.01 a share and revenue of $319.1 million.
--Editors: Nick Turner, Steven McPherson
To contact the reporter on this story: Jordan Robertson in San Francisco at jrobertson40@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
