F5 Networks Posts Record Sales
By Bill Snyder
TheStreet.com Staff Reporter
4/21/2004 5:07 PM EDT
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Updated from 4:24 p.m. EDT
F5 Networks (FFIV:Nasdaq - news - research) pushed second-quarter revenue to a record $40.6 million and beat Wall Street's profit expectations by 2 cents a share, the networking company announced after the close on Wednesday.
Net income in the second quarter was $6 million, or 16 cents a diluted share, compared to a profit of $800,000 or 3 cents a share, a year ago.
Analysts polled by Thomson First Call were expecting a 14-cent profit on sales of $38.6 million.
In Wednesday's regular session, F5 shares rose $1.69, or 5.6%, to $31.83. After hours, the stock was recently up 17 cents, or 0.5%, to $32.
F5 sells products used to balance loads on traditional data networks and, more recently, wireless networks.
Once the slump in information technology spending began to ease early last year, F5 became a growth story. Its top line grew from $27 million to $36 million, a gain of 33%, between December 2002 and December 2003, while net income jumped from $520,000 to $3.8 million, or 2 cents to 11 cents per share.
Looking forward to the third quarter, the company expects to earn a profit of 18 cents to 20 cents a share on sales ranging from $42 million to $44 million. Analysts polled by Thomson First Call were a 16 cents profit on sales of $40.76 million.
One key driver has been the growth in the telecommunications industry.
"Recent channel checks with resellers and other industry contacts suggest to us that F5's sales to carriers, particularly wireless carriers, continue to grow rapidly," Pacific Growth analyst Erik Suppiger wrote. "In the December quarter, the company reported that sales to Telco carriers increased from 17% of revenue to 20%, which we calculate represented 40% of the company's entire sequential growth." (Pacific Growth does not have a current banking relationship with F5.)
Similarly, Samuel Wilson of JMP Securities, said he has heard "the company has been shipping significant orders to Asia, most likely Japan, and that any orders placed now will not be delivered until April, except for emergencies. In the past, this type of business tone was typically an indicator that business for the quarter had gone well. If our checks are correct, we believe that the company is building backlog for the June quarter." (JMP has recently done investment banking for F5.) |
