F5 Networks Earnings on the Horizon

S&P 500 (NYSE:SPY) component F5 Networks, Inc. (NASDAQ:FFIV) will unveil its latest earnings on Wednesday, October 24, 2012. F5 Networks provides technology that optimizes the security and performance of servers, data storage devices and other network resources.

F5 Networks, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 94 cents per share, a rise of 11.9% from the company’s actual earnings for the year-ago quarter. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. Analysts are projecting profit to rise by 19.9% versus last year to $3.55.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by one cent, reporting net income of 92 cents per share against a mean estimate of profit of 91 cents per share.

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Wall St. Revenue Expectations: Analysts are projecting a rise of 16.3% in revenue from the year-earlier quarter to $365.9 million.

A Look Back: In the third quarter, profit rose 15.6% to $72.3 million (91 cents a share) from $62.5 million (77 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 21.3% to $352.6 million from $290.7 million.

Stock Price Performance: Between September 20, 2012 and October 18, 2012, the stock price dropped $12.31 (-11.3%), from $109.36 to $97.05. The stock price saw one of its best stretches over the last year between September 11, 2012 and September 19, 2012, when shares rose for seven straight days, increasing 16% (+$15.26) over that span. It saw one of its worst periods between May 11, 2012 and May 18, 2012 when shares fell for six straight days, dropping 10.5% (-$13.20) over that span.

Key Stats:

The company enters this earnings announcement with substantial revenue momentum. The company has averaged year-over-year revenue growth of 21.8% over the last four quarters.

This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 19.5% in the first quarter and 23.5% in the second quarter before increasing again in the third quarter.

Analyst Ratings: With 17 analysts rating the stock a buy, none rating it a sell and 13 rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.75 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 1.72 in the second quarter to the last quarter driven in part by an increase in current assets. Current assets increased 4.9% to $782.9 million while liabilities rose by 2.9% to $446.6 million.

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

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