Tuesday, F5 Networks Inc. (FFIV), an application delivery networking solutions provider, raised its GAAP earnings outlook for the second quarter. The company, however, lowered its second quarter revenue estimate, as sales were slower than expected across all geographic regions.
For the second quarter of fiscal year 2009, the Seattle, Washington-based company raised GAAP earnings estimate to a range of $18.5 million to $19.3 million, or $0.23 to $0.24 per share from its prior estimate of $15.2 million to $16.8 million, or $0.19 to $0.21 per share.
Non-GAAP earnings are expected to be $29.8 million to $30.6 million, or $0.37 to $0.38 per share, compared to previous estimate of $28.6 million and $30.2 million, or $0.36 to $0.38 per share.
On average, 22 analysts polled by Thomson Reuters expect the company to earn $0.36 per share for the second quarter. Analysts' estimate typically excludes special items.
The company lowered its second quarter revenue estimate to $154.1 million from its previous expectation of $157 million to $164 million. Twenty-two analysts currently have a consensus revenue estimate of $157.23 million for the second quarter.
For the second quarter of fiscal year 2007, F5 reported net income of $20.0 million or $0.47 per share, and revenue of $127.6 million.
F5 noted that sales during the second quarter were slower than expected across all geographic regions. Revenue from application delivery controller business was flat over last year, and declined sequentially. Revenue from the company's file virtualization business dropped from the prior year quarter, but grew about 23% from the first quarter of fiscal 2009.
The company estimates GAAP gross margin to be slightly below its prior guidance of 77% to 78%, due to an accrual for a legal settlement. The company nevertheless expects to meet its non-GAAP gross margin targets despite the overall slowdown in sales.
As a result of aggressive cost-reduction and expense-control measures, the company said it expects to achieve a non-GAAP operating margin above 27% for the second quarter, exceeding its earlier target of 25%.
F5 Networks closed Tuesday's regular trading session at $22.54, down 55 cents or 2.38%, on a volume of 2.01 million shares. In the after-hours, the shares gained $1.31 or 5.81%. The stock has been moving in a range of $17.70 - $35.85 for the past 52 weeks, with an average daily volume of about 2.19 million shares for the past three months.
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