Akamai’s Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Akamai Technologies, Inc. (NASDAQ:AKAM) will unveil its latest earnings on Wednesday, July 25, 2012. Akamai Technologies provides a distributed computing platform for accelerating and improving delivery of content and applications over the Internet. The company also offers solutions that enhance tools that people use for business transactions. .

Akamai Technologies, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 26 cents per share, a decline of 7.1% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 29 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 26 cents during the last month. Analysts are projecting profit to rise by 0.9% compared to last year’s $1.18.

Past Earnings Performance: The company is looking to beat analyst estimates for the third quarter in a row. Last quarter, it beat estimates with profit of 30 cents per share against the mean estimate of 28 cents. In the prior quarter, the company reported net income of 35 cents.

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Stock Price Performance: Between April 24, 2012 and July 19, 2012, the stock price fell $7.25 (-19.2%), from $37.74 to $30.49. It saw one of its worst periods between November 15, 2011 and November 23, 2011 when shares fell for seven straight days, dropping 10.8% (-$3.18) over that span. The stock price saw one of its best stretches over the last year between February 6, 2012 and February 13, 2012, when shares rose for six straight days, increasing 15.6% (+$5.20) over that span.

Wall St. Revenue Expectations: On average, analysts predict $326 million in revenue this quarter, a rise of 17.7% from the year-ago quarter. Analysts are forecasting total revenue of $1.35 billion for the year, a rise of 16.4% from last year’s revenue of $1.16 billion.

A Look Back: In the first quarter, profit fell 14.6% to $43.2 million (24 cents a share) from $50.6 million (26 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 15.8% to $319.4 million from $276 million.

Key Stats:

The company enters this earnings announcement with substantial revenue momentum. The company has averaged year-over-year revenue growth of 13.4% over the last four quarters.

After last quarter’s profit drop broke a string of income increases, this earnings announcement is definitely a chance for a rebound. Net income rose 25.7% in the second quarter of the last fiscal year, 6.5% in the third quarter of the last fiscal year and 14.4% in the fourth quarter of the last fiscal year before declining in the first quarter.

Analyst Ratings: There are 11 out of 20 analysts surveyed (55%) rating Akamai Technologies a buy. Over the last three months, the stock’s average rating has increased from hold to moderate buy.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 4.57 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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