Akamai Technologies Posts In-Line Q1 Earnings, But Issues Weak Earnings Forecast

reported in-line earnings for the first quarter, but the company issued a weak earnings forecast for the current quarter. For the second quarter, Akamai projects adjusted earnings of $0.55 to $0.59 per share, on revenue of $532 million to $547 million. Analysts had expected earnings of $0.63 per share on revenue of $544.8 million. The Cambridge, Massachusetts-based company reported a quarterly profit of $77.7 million, or $0.43 per share, versus a year-ago profit of $72.8 million, or $0.40 per share. Excluding items, the company's profit climbed to $0.61 per share from $0.58 per share. Its revenue climbed 16 percent to $526.5 million. However, analysts were expecting a profit of $0.61 per share on revenue of $526.18 million. The average estimate among 26 Estimize users was for earnings of $0.65 per share and revenue of $532.82 million. Revenue at its performance-and-security segment rose 21 percent, while revenue at its media delivery solutions segment climbed 12 percent in the latest quarter. Revenue from service and support solutions segment gained 12 percent year-over-year in the quarter. Akamai's gross margin shrank to 67.8 percent, versus 69.2 percent, a year ago. Adjusted EBITDA rose to $223 million in the latest quarter, from $204 million in the year-ago quarter. Non-GAAP income from operations climbed to $163 million, from $159 million, while non-GAAP operating margin for the first quarter of 2015 shrank four percentage points from the year-ago quarter to 31 percent. During the first quarter of 2015, Akamai repurchased 0.9 million shares of its common stock at an average price of $67.24 per share. As of March 31, 2015, Akamai had $1.5 billion in cash, cash equivalents and marketable securities. "Q1 was another strong quarter for Akamai driven by continued solid revenue performance across all of our geographies and all of our major product lines, with especially strong growth from our Cloud Security Solutions," said Dr. Tom Leighton, CEO of Akamai. "We continued to make major investments in the expansion of our platform and product portfolio to make the Internet fast, reliable and secure for our customers." Akamai shares fell 7.93 percent to $70.04 in the after-hours trading session.