Akamai, Citrix Slide After Forecasts Fall Short of Analysts’ Estimates

Akamai Technologies Inc. (AKAM), TriQuint Semiconductor Inc. and other technology companies tumbled in U.S. trading after profit forecasts missed analysts’ estimates.

Akamai, which operates a server network to speed data delivery, plunged 19 percent on the Nasdaq Stock Market. TriQuint, a maker of communications chips, dropped 27 percent. Earnings also sent down shares of HomeAway Inc.

The largest computer hardware and software companies, including International Business Machines Corp., Microsoft Corp. (MSFT) and SAP AG, are outperforming smaller vendors, said Israel Hernandez, a Barclays Capital analyst. That’s because they’re better able to draw on large groups of customers and sales leads when some clients hold back on spending, he said.

“The one consistent thing is the bigger global vendors did better,” the San Francisco-based analyst said. “When things get a little tight, they just have a lot more to work with.”

Akamai’s third-quarter profit will be 31 cents to 34 cents a share, excluding some items, Chief Financial Officer J.D. Sherman said yesterday on a conference call. That compares with an average analyst estimate of 38 cents. The Cambridge, Massachusetts-based company expects sales of $273 million to $283 million, compared with a projection of $288.7 million.

Mounting Competition

Akamai, whose customers include Apple Inc. (AAPL) and Netflix Inc., provides services such as application acceleration and cloud-computing security. The company faces more competition from Limelight Networks Inc. and Level 3 Communications Inc., said Chad Bartley, an analyst at Pacific Crest Securities Inc. in Portland, Oregon.

Akamai expects 10 percent to 13 percent growth in revenue for the year, Sherman said. Analysts on average had projected 14 percent sales growth, according to Bloomberg data. The shares plunged $5.64 to $23.84, the biggest decline in three years.

“There are more solutions, more alternatives to Akamai,” said Bartley, who has a “sector-perform” rating on the stock and doesn’t own it. “We are seeing more pricing pressure.”

TriQuint, based in Hillsboro, Oregon, gave sales and profit forecasts for the current period that trailed analysts’ estimates. The stock dropped $2.73 to $7.48 for the biggest decline in almost two years.

HomeAway, an online vacation-rental service, posted its first quarterly results yesterday since its initial public offering last month. The Austin, Texas-based company said second-quarter profit fell 85 percent, dragged down by marketing expenses. Net income dropped to $2.2 million from $14.9 million a year earlier. Sales rose 41 percent to $58.7 million.

HomeAway Falls

HomeAway dropped $1.38, or 3.2 percent, to $41.39, for its biggest tumble in a month.

Symantec Corp. (SYMC) and LSI Corp. (LSI) and Citrix Systems Inc. (CTXS) bucked the trend, delivering earnings that sent shares up.

Symantec, the largest maker of computer-security software, forecast higher profit and sales than analysts had predicted, lifted by businesses spending more to fight hacking.

Excluding some costs, profit will be 38 cents to 39 cents this quarter, Mountain View, California-based Symantec said yesterday. That compares with a 38-cent average estimate, according to Bloomberg data. Sales will be $1.66 billion to $1.68 billion, topping the consensus projection of $1.61 billion. Symantec shares climbed $1.08, or 5.8 percent, to $19.49 on the Nasdaq Stock Market, the biggest rise in almost a year.

LSI Gains

LSI, a maker of chips used in computer disk drives, forecast third-quarter sales from continuing operations of $535 million to $565 million. Analysts had predicted $510.7 million on average. The strong forecast reflects market share gains, said Abhi Talwalkar, chief executive officer of the Milpitas, California-based company. LSI shares rose 91 cents, or 14 percent, to $7.35 on the New York Stock Exchange for the biggest gain in more than two years.

Citrix, based in Fort Lauderdale, Florida, reported second- quarter profit excluding some items of 57 cents, beating the average 55-cent estimate of analysts surveyed by Bloomberg. The shares increased $1.88, or 2.7 percent, to $72.82.

To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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