F5 Networks 2Q Profit Falls 12%, But Adj. EPS Beats, Guides 2Q Above Consensus

F5 Networks, Inc.

reported 12% drop in net income to $75.4 million in the second quarter from $85.7 million in the year-ago quarter. Its earnings also dipped 6% to $1.11 a share from $1.18 a share in the comparable period. On an adjusted basis also, its net income fell 1.1% to $114 million from $115.3 million. However, adjusted earnings rose 5.7% to $1.68 a share from $1.59 a share in the prior year quarter and topped the Street expectations by $0.05 a share. Its total revenue grew 2.44% to $483.68 million from $472.14 million in the previous year quarter. While the products division witnessed weakness in generating revenue, services compensated more than that. F5 Network's President and CEO, John McAdam, reacted to the results saying that "Given the backdrop of a continued difficult macro and spending environment, I was pleased with our execution, as we delivered revenue within our guided range while maintaining solid profitability.In addition, sales of our Better/Best software bundles, Virtual Editions, and Silverline subscription services all grew during the quarter as customers continued to embrace hybrid strategies and venture into public and private clouds." He continued that saying, "This quarter, we will begin shipping our new 100Gb VIPRION blades, which deliver massive performance and scalability to help service providers manage and secure the exponentially increasing volume of wireless traffic. As I mentioned during last quarter's conference call, several Tier 1 service providers have been testing the new blades, and feedback has been very positive. Also, in this quarter we will release version 5.0 of our BIG-IQ management platform, with major enhancements that include centralized management of all our Security products." Moving ahead, F5 Networks guided second quarter adjusted earnings to be $1.77 - $1.80 a share, which was above the Street consensus of $1.74 a share. Following this, shares of the company traded 4% higher in the pre-market trading.