Network equipment maker F5 Networks Inc reported better-than-expected quarterly results as product sales jumped 20 percent, and forecast a strong fiscal 2012 revenue, sending its shares up 8 percent in after-hours trading.
The company, which makes products to speed up data over wide area networks (WAN), is benefiting from the need to manage network bandwidth as millions of smartphone and tablet users exponentially grow data traffic.
F5, which competes with Riverbed Technology Inc, expects 2012 revenue to grow at least 20 percent, implying revenue of $1.38 billion or more, ahead of analysts' estimates of $1.35 billion, according to Thomson Reuters I/B/E/S.
Last Wednesday, Riverbed reported strong third-quarter results, a day after larger rival Juniper Networks Inc forecast October-December results largely below analysts' expectations, hurt by weak customer spending.
The number one priority is to reaccelerate product revenue growth. We believe we can do that in Q2. We've looked to the sales productivity ... our pipeline, and we think we have a good handle on that, F5 said on a call with analysts.
The company, however, forecast a first quarter in line with estimates, citing seasonality issues like decreased business from telecom service providers as networks remain closed for the holiday period.
For October-December, F5 expects a profit of 99 cents to $1.01 a share, excluding items, on revenue of $315-$320 million.
Analysts were looking for adjusted earnings of $1 a share and revenue of $320 million.
July-September net income rose to $67.6 million, or 84 cents a share, from $48.2 million, or 59 cents a share, a year ago.
Excluding items, the company earned $1.06 a share, while revenue rose 24 percent to $314.6 million.
Analysts had expected an adjusted profit of 98 cents a share, on revenue of $308.5 million, according to Thomson Reuters I/B/E/S.
The company's shares rose to $95.65 in extended trading. They closed at $88.76 on Tuesday on Nasdaq.
The stock has fallen 10 percent since the company reported third-quarter results on July 20.
(Reporting by Sayantani Ghosh in Bangalore; Editing by Viraj Nair and Sriraj Kalluvila)