Market Overview

Earnings Preview For Akamai Technologies (AKAM, LLNW)

Akamai Technologies (NASDAQ: AKAM) is expected to announce its Q1 earnings report on Wednesday, April 27, after the markets close. Analysts are predicting earnings per share to reach $0.37. Last year, the equivalent value was $0.35.

Akamai Technologies, a Massachusetts-based company, provides services for accelerating and improving the delivery of content and applications over the Internet, ranging from live and on-demand streaming video capabilities to conventional content on Websites. The company also produces tools that help people transact business and reach out to new and existing customers. Its services are used to sell, inform, entertain, market, advertise, deliver software and conduct their business online. It offers application performance services, services and solutions for digital media and software distribution and storage, content and application delivery, online advertising-related services and other specialized Internet-based offerings. In July 2010, the company completed the acquisition of Velocitude. The company currently employs around 2,200 people.

Investors will be watching closely the outcome of Akamai's lawsuit against Limelight Networks (NASDAQ: LLNW) in the following months. Akamai Technologies persuaded a U.S. appeals court to reconsider whether Limelight Networks infringed Akamai's patent over software that speeds delivery of Web videos. Akamai Technologies has failed in its first attempt to prove its Arizona-based competitor was building its business on technology developed by Akamai's founders. If the lawsuit is a success, it will probably provide a further boost to Akamai's revenues.

On Wednesday, Akamai is expected to report revenues of $272.03 million – a 13.3% rise on a yearly basis. For the year as a whole, revenues are expected to go up by 15.3%, while earnings per share is expected to grow at a slower pace of 11.9%, some way behind the industry's average of 29.3%. Weaker results compared to its competitors have probably contributed to the falling value of Akamai's shares over the last three months, when its shares lost more than 14% of their value. The last month has been an improvement, however, as Akamai's shares gained more than 7%.

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