July 25, 2017 / 8:40 PM / in 2 months

Akamai current-quarter forecasts miss estimates, shares fall

(Reuters) - Akamai Technologies Inc, which helps speed up content delivery over the internet, forecast current-quarter revenue and profit that missed Wall Street estimates, sending its shares down about 7 percent in after-hours trading on Tuesday.

The company said it expected third-quarter revenue of $604 million to $616 million and adjusted earnings of 57 cents per share to 60 cents per share.

Analysts on average were expecting earnings of 61 cents per share and revenue of $619.4 million, according to Thomson Reuters I/B/E/S.

Akamai’s traditional media delivery business has been under pressure as many of the company’s clients develop in-house capabilities to handle their web traffic.

Revenue in the business, which caters to the “Big Six” internet companies such as Apple Inc, Amazon.com Inc, Netflix Inc, fell 9 percent to $178.9 million in the second quarter ended June 30, the seventh straight quarter of decline.

“We did lose some share in a few large, primarily American gaming companies. We’re actually working hard at getting that share back, and I‘m optimistic about that,” Chief Executive Tom Leighton said on the company’s earnings call.

To counter weakness in the business, Akamai has been building up its performance and security division.

Revenue in the business, which offers tools to improve web performance and defend against cyberattack, rose 15 percent in the three months ended June.

Within that business, cloud security business revenue surged over 32 percent.

The company’s net income fell to $57.8 million, or 33 cents per share, from $73.6 million, or 42 cents per share, a year earlier.

Excluding items, the company earned 62 cents per share, just ahead of analysts’ average estimate of 60 cents, according to Thomson Reuters I/B/E/S.

Total revenue rose 6.4 percent to $608.9 million, beating estimates of $604.5 million.

The company’s shares were down at $49.49 in after-hours trading on Tuesday. They had fallen 20 percent this year.

Reporting by Ismail Shakil in Bengaluru; Editing by Maju Samuel and Sriraj Kalluvila

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