Ahead Of The Bell: F5 Networks

HARTFORD, Conn. (AP) — Shares of F5 Networks Inc. jumped in premarket trading Thursday, a day after the manufacturer of products that manage and route computer network traffic reported a 44 percent profit increase in its fiscal fourth quarter.

Deutsche Bank analyst Brian Modoff subsequently increased his earnings estimate and raised his price target, saying the Seattle company is growing along with industry trends.

In a note to clients, Modoff said he believes F5 Networks "can continue to grow ahead of expectations. He maintained his "Buy" rating and raised his price target to $48 from $46.

Shares rose $4.64, or 11 percent, to $46.17 in trading before the opening bell.

F5 Networks said Wednesday net income for the quarter was $28.4 million, or 36 cents per share, up from $19.7 million, or 24 cents per share, in the same quarter last year.

Excluding stock-based compensation, net income for the quarter was $40 million, or 50 cents per share, compared with $33.4 million, or 41 cents per share in the fourth quarter of fiscal 2008.

Modoff said F5 Networks benefited from continued stabilization in capital spending and demand from customers and a "meaningful improvement in its deal closure rate."

He raised his fiscal 2010 estimate to $1.83 per share from $1.77 and increased his fiscal 2011 estimate to $2.10 per share from $2.05 per share.

Analysts surveyed by Thomson Reuters expect, on average, earnings to be $1.78 per share next year and $2.09 per share for 2011.