Akamai Technologies Earnings: Here’s Why Shares are Crashing Now

Akamai Technologies Inc. (NASDAQ:AKAM) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 15.6%.

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Akamai Technologies Inc. Earnings Cheat Sheet

Results: Net income increased 63.12% to $98 million (54 cents per diluted share) in the quarter versus a net gain of $60.08 million in the year-earlier quarter.

Revenue: Rose 16.76% to $378 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Akamai Technologies Inc. reported adjusted net income of 54 cents per share. By that measure, the company beat the mean analyst estimate of $0.47. It beat the average revenue estimate of $370.11 million.

Quoting Management: “With strong revenue and profit performance in the fourth quarter, Akamai closed out 2012 with record results on both the top and bottom line,” said Tom Leighton, CEO of Akamai. “Throughout the year, we announced new products across every solution line, closed a record number of strategic acquisitions, and achieved margin expansion through continued improvement in our network efficiency even as we expanded its capacity worldwide to meet rising demand for Akamai services. We believe these efforts have positioned us well to help our customers capitalize on the opportunities, and mitigate the challenges, of conducting business online.”

Key Stats (on next page)…

Revenue increased 9.46% from $345.32 million in the previous quarter. Net income increased 103.19% from $48.23 million in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.47 and has not changed. For the current year, the average estimate has moved up from a profit of $1.97 to a profit of $2 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)