Akamai Soars as First-Quarter Profit Tops Analyst Estimates
Akamai Technologies Inc. (AKAM), which helps customers deliver online content faster, jumped 18 percent after reporting revenue and profit that topped analysts’ estimates as Internet traffic increased more than expected.
The stock surged to $42.48 at the close in New York, the biggest one-day gain since July of last year. First-quarter profit, including an 8-cent tax benefit, rose to 51 cents a share from 36 cents a year earlier, Akamai said yesterday in a statement. That topped the average estimate of 46 cents, according to data compiled by Bloomberg.
Akamai said traffic on the Internet accelerated faster than it expected as more people spent time playing games, watching videos and using social media. The company also sold more of the services that it has added on top of the content-delivery business, with security as its fastest-growing product.
“It looks solid every way you slice it,” said Jeff Van Rhee, an analyst with Craig-Hallum Capital Group in Berwyn, Pennsylvania. “They’re ahead of the street on pretty much everything they could be.”
On a conference call with analysts, the company forecast second-quarter profit excluding some items of 44 cents to 46 cents, compared with a 44-cent estimate.
First-quarter revenue increased 15 percent to $368 million. Analysts had estimated $357.7 million. The company forecasts revenue of $368 million to $378 million in the second quarter, compared with a $363 million analyst estimate.
The Cambridge, Massachusetts-based company has fallen 12 percent this year through yesterday’s close, as the Standard & Poor’s 500 Index added 11 percent.
Akamai named co-founder Tom Leighton as its next chief executive officer in December after an eight-month search. He took the job on Jan. 1.
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