F5 Networks Inc. Earnings Cheat Sheet: Beats Forecasts

S&P 500 (NYSE:SPY) component F5 Networks, Inc. (NASDAQ:FFIV) reported net income above Wall Street’s expectations for the fourth quarter. F5 Networks provides technology that optimizes the security and performance of servers, data storage devices and other network resources.

Investing Insights: Amazon.com has a Stock Chart Technical Analysts Dream About.

F5 Networks Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the application software company rose to $67.6 million (84 cents per share) vs. $48.2 million (59 cents per share) in the same quarter a year earlier. This marks a rise of 40.2% from the year earlier quarter.

Revenue: Rose 23.7% to $314.6 million from the year earlier quarter.

Actual vs. Wall St. Expectations: FFIV reported adjusted net income of $1.06 per share. By that measure, the company beat the mean estimate of 77 cents per share. Analysts were expecting revenue of $308.6 million.

Quoting Management: F5 president and chief executive officer John McAdam: “In the first full quarter that VIPRION 2400 was generally available, demand for the new mid-range chassis exceeded our expectations. During the fourth quarter, we also saw strong demand for VIPRION 4400, our high-end chassis, particularly among our Telco customers. “Since we announced the availability of TMOS v.11 early in the quarter, customer response has been very positive. As more customers begin to roll out TMOS v.11 across their organizations, we expect to see strengthening demand for our VIPRION products, which are designed to support the full range of features and functions available in the new software.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 34.1%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose 45.2% from the year earlier quarter.

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 0.6 percentage point to 82.2% from the year earlier quarter. Over that span, margins have grown on average 1.7 percentage points per quarter on a year-over-year basis.

The company has now seen net income rise in three straight quarters. In the third quarter, net income rose 54.5% and in the second quarter, the figure rose 67.7%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 6 cents in the third quarter, by one cent in the second quarter, and by 3 cents in the first quarter.

Looking Forward: Over the past ninety days, the average estimate for the first quarter of the next fiscal year has fallen from 82 cents per share to 81 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. For the fiscal year, the average estimate has moved down from $2.91 a share to $2.90 over the last ninety days.

Competitors to Watch: Blue Coat Systems, Inc. (NASDAQ:BCSI), Radware Ltd. (NASDAQ:RDWR), Riverbed Technology, Inc. (NASDAQ:RVBD), Cisco Systems, Inc. (NASDAQ:CSCO), Procera Networks, Inc. (AMEX:PKT), Juniper Networks, Inc. (NYSE:JNPR), Dialogic Inc (NASDAQ:DLGC), NetScout Systems, Inc. (NASDAQ:NTCT), Brocade Communications Systems, Inc. (NASDAQ:BRCD), and Hewlett-Packard Company (NYSE:HPQ).

Investing Insights: Amazon.com has a Stock Chart Technical Analysts Dream About.

(Source: Xignite Financials)