February 10, 2015 / 9:24 PM / 3 years ago

Akamai revenue beats Street as security product sales swell

(Reuters) - Akamai Technologies Inc’s quarterly profit and revenue beat market estimates as demand jumped both for its security products and mainstay content delivery businesses.

Akamai shares shot up 5 percent in extended trading on Tuesday before shedding some gains after it issued a cautious forecast for the current quarter.

Revenue in Akamai’s security business soared 24.7 percent to $239.7 million in the fourth quarter ended Dec. 31.

High-profile hacking incidents have dogged companies including Sony Corp, Target Corp and health insurer Anthem Inc in recent years.

“The attacks are getting more frequent, larger, more sophisticated and damaging,” Chief Executive Tom Leighton told Reuters. “That helps drive (the) need for our capabilities to defend enterprises.”

Revenue in Akamai’s media delivery solutions business jumped about 21 percent to $250 million, reflecting the need for faster delivery of video and data on the Internet as more consumers play games and watch videos online.

“The security portion of their business probably has a more stable growth trajectory,” Jim Breen, an analyst at William Blair & Co, told Reuters.

“The media business tends to be volatile around different events and different times of the year.”

Total revenue rose 23 percent to $536.3 million.

Net income increased to $97.1 million, or 54 cents per share, from $80.3 million, or 44 cents per share.

Excluding a tax benefit of 5 cents per share, Akamai earned 65 cents per share on an adjusted basis.

Analysts on average had expected a profit of 63 cents per share on revenue of $526.8 million, according to Thomson Reuters I/B/E/S.

Akamai forecast a profit of 60-63 cents per share and revenue of $517 million-$534 million for the first quarter, citing a stronger dollar and moderation in growth in its media business due to the lack of major sporting events.

The Sochi Winter Olympics helped Akamai’s year-ago quarter.

Analysts were expecting a profit of 62 cents per share on revenue of $527.3 million.

“I think right now they are trying to be conservative and just basing their guidance on their core business,” said Breen, who rates the company as “outperform”.

Additional reporting by Subrat Patnaik and Abhirup Roy in Bengaluru; Editing by Joyjeet Das

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