Rising costs hurt S&P 500 (NYSE:SPY) component Akamai Technologies Inc. (NASDAQ:AKAM) in the second quarter as profit dropped from a year earlier. 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.
Investing Insights: Is TV the Next Bullish Catalyst for Apple’s Stock?
Akamai Technologies Inc. Earnings Cheat Sheet
Results: Net income for Akamai Technologies Inc. fell to $44.2 million (24 cents per share) vs. $47.9 million (25 cents per share) a year earlier. This is a decline of 7.7% from the year-earlier quarter.
Revenue: Rose 19.6% to $331.3 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: Akamai Technologies Inc. reported adjusted net income of 43 cents per share. By that measure, the company beat the mean estimate of 26 cents per share. Analysts were expecting revenue of $325.7 million.
Quoting Management: “Akamai’s very strong second quarter results were driven on the top line by increased adoption of our cloud infrastructure solutions as well as continued growth of content delivery solutions,” said Paul Sagan, President and CEO of Akamai. “Our bottom line performance was the result of significant benefits we have begun to realize from improvements we are making to scale our network operations.”
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 14.6%, with the biggest boost coming in the most recent quarter when revenue rose 19.6% from the year earlier quarter.
The company has now seen net income fall in each of the last two quarters. In the first quarter, net income fell 14.6% from the year-earlier quarter.
The company has now topped analyst estimates for the last three quarters. It beat the mark by 2 cents in the first quarter and by 4 cents in the fourth quarter of the last fiscal year.
The company’s cost of sales rose 19.9% from a year earlier. Last quarter, cost of sales was 32.4% of revenue, similar to the prior-year quarter.
Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the third quarter is 27 cents per share, down from 30 cents ninety days ago. At $1.18 per share, the average estimate for the fiscal year has fallen from $1.26 ninety days ago.
Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.
(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)
Don’t Miss These Additional Hot Stories: