Quarterly profit, next-quarter forecast exceed expectations
F5 Networks yesterday reported a quarterly profit that exceeded analyst expectations and shared a better-than-expected forecast for its ongoing fourth quarter.
I thought I’d take a break from the series of customer stories I’ve been doing, since healthy financial news seems a rarity in this economy. In particular, any suggestion that IT purchases may be stabilizing is worth sharing.
This week’s encouraging news comes from F5 Networks, which yesterday reported a quarterly profit that exceeded analyst expectations and shared a better-than-expected forecast for its ongoing fourth quarter.
“While it is still too early to say that the worst is behind us, customer buying patterns did appear to stabilize during the third quarter,” said F5 president and CEO John McAdam in a statement.
Net income came in at $22.8 million, or 29 cents per share. That’s a gain of 19% compared to $19.1 million, or 23 cents per share, earned in the third quarter a year ago. Revenue came in at $158.2 million, a drop of 4.4% from the $165.6 million reported in the third quarter of fiscal 2008 but still better than analyst expectations.
Excluding a stock option expense, non-GAAP net income was 40 cents per share. Analysts polled by Thomson Reuters had predicted a profit of 37 cents per share, excluding exceptional items, on revenue of $153.6 million.
“We were able to grow revenue sequentially and exceed our revenue target,” McAdam said. “Coupled with better top-line performance, modest gross margin improvement and ongoing expense controls further improved our non-GAAP operating margin and enabled us to exceed both our GAAP and non-GAAP earnings targets as well.”
Acknowledging that weakness and uncertainty in the global economy persist, McAdam said he is encouraged by the company’s third quarter results. For the current quarter, F5 has set a revenue goal of $160 million to $164 million with an earnings target (excluding stock-based compensation expenses) of 40 cents to 42 cents per share. Analysts were expecting target revenue of $158.3 million with earnings of 38 cents per share.
