Impressive 3Q for Akamai - Analyst Blog
25 Ottobre 2012 - 10:50AM
Zacks
Akamai Technologies, Inc.
(AKAM) reported third quarter earnings of
27 cents per share, up 17.4% from 23 cents earned in the year-ago
quarter. Earnings including stock-based compensation expense and
amortization of capitalized stock-based compensation, but excluding
amortization of other intangible and restructuring charges, came in
at 30 cents per share that beat the Zacks Consensus Estimate by a
penny.
Quarter
Details
Total revenue jumped 22.5% year
over year to $345.3 million, which was well ahead of the Zacks
Consensus Estimate. Total revenue also surpassed management’s
guided range of $332.0 million to $342.0 million. The
better-than-expected result was primarily driven by continued solid
growth across its business segments.
Cloud infrastructure solutions
increased 22.0% year over year, while content delivery solutions
jumped 23% year over year in the reported quarter. Higher adoption
of cloud infrastructure services (58% of the total revenue),
increased demand for optimization, performance and security
solutions and strong traffic growth on a year-over-year basis were
the main revenue drivers during the quarter.
Media & Entertainment was the
fastest-growing (up 23.1% year over year) segment in the quarter,
followed by Enterprise (up 21.6%), Commerce (up 20.5%), Public
sector (up 19.6%) and High Tech (up 17.4%).
Region wise, revenue from North
America climbed 23.0% while international revenues jumped 30.0% on
a year-over-year basis in the quarter. Europe and Asia-Pacific
registered solid revenue growth during the quarter.
Gross profit surged 24.8% year over
year to $235.3 million in the reported quarter. Gross margin
expanded 110 basis points (bps) year over year to 68.1%.
Total operating expenses surged
26.1% year over year to $150.0 million. The year-over-year growth
in expenses was primarily due to higher general &
administrative expense (up 7.2% year over year), research &
development expense (up 42.9% year over year) and sales &
marketing expense (up 39.3% year over year).
Operating income soared 22.5% year
over year to $85.4 million. Operating margin in the quarter
remained flat on a year-over-year basis at 24.7%. Adjusted earnings
before interest, taxes, depreciation, and amortization (EBITDA)
increased 27.9% year over year to $156.5 million in the quarter.
EBITDA margin stood at 45% in the quarter.
Net income increased 14.1% year
over year to $48.2 million in the quarter. Including stock-based
compensation expense and amortization of capitalized stock-based
compensation, but excluding amortization of other intangible
charges and restructuring charges, net income increased 15.6% year
over year to $53.9 million.
Akamai exited the quarter with cash
and cash equivalents (including short-term marketable securities)
of $465.2 million compared with $496.6 million in the prior
quarter. Akamai generated cash flow from operations of $141.5
million in the reported quarter versus $149.6 million in the
previous quarter.
Guidance
Akamai expects revenue in the range
of $373.0 million to $385.0 million for the fourth quarter of 2012.
Akamai expects GAAP gross margin of approximately 70.0%. Akamai
expects adjusted EBITDA margin of 45.0%. Operating expense is
expected to be in the range of $14.0 million to $16.0 million.
Earnings are expected to be between
48 cents and 52 cents per share, including tax charge of $34
million to $38 million, based on a GAAP tax rate of about 39%.
Akamai forecasts capital expenditure (excluding equity-based
compensation) of approximately $60.0 million to $65.0 million for
the forthcoming quarter.
Our Take
We believe that strong demand for
cloud infrastructure solutions, security and mobile products,
online video along with aggressive share repurchase and strategic
partnerships are positives for the stock going forward.
However, intense competition from
Level 3 Communications Inc.
(LVLT), Limelight Networks, Inc.
(LLNW) and carriers such as
AT&T Inc. (T) and
Verizon Communications (VZ), who
are developing their own content delivery network, remains the
major concern.
Thus, we maintain our Neutral
recommendation on a long-term basis (6-12 months). Currently,
Akamai has a Zacks #2 Rank, which implies a Buy rating on a
short-term basis.
AKAMAI TECH (AKAM): Free Stock Analysis Report
LIMELIGHT NETWK (LLNW): Free Stock Analysis Report
LEVEL 3 COMM (LVLT): Free Stock Analysis Report
AT&T INC (T): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Grafico Azioni Limelight Networks (NASDAQ:LLNW)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Limelight Networks (NASDAQ:LLNW)
Storico
Da Lug 2023 a Lug 2024