Data networking specialist F5 Networks ( FFIV) is the latest company to take a hit from the tech spending slowdown, but it seems more prepared than most. The company said Tuesday that its fourth-quarter revenue is now expected to be $171.3 million, below the company's initial guidance of $172 to $174 million. F5 said that it would nonetheless meet its July earnings estimate of between 19 and 20 cents per share, pushing its stock up more than 5% in recent trading to $22.63. Analysts had estimated earnings of 20 cents and revenue of $172.79 million. With many users closing up their corporate coffers, F5 CEO John McAdam explained that the financial sector's current woes contributed to his firm's revenue miss. "Our financial vertical accounted for 16% of revenue, the lowest it has been for some time," he said, during a conference call Tuesday. "We're convinced that this is the result of recent events -- clearly there are significant economic challenges facing businesses globally." F5, which competes with Cisco ( CSCO) and Citrix ( CTXS) in the application delivery market, also struggled to ship enough of its recently launched Big-IP 1600 and 3600 devices. "We under-estimated demand for many of these," said McAdam, adding that BIG-IP 3600 sales in September alone exceeded F5's forecast for the entire quarter. In addition to boosting its sales efforts, the company is also planning to refresh the BIG-IP product line in 2009, although the CEO would not got into specific details on Tuesday's call.
McAdam also pointed to F5's cash position as evidence of the firm's ability to weather the current economic storm. "The company is very profitable -- our balance sheet is solid, we ended the year with cash and investments in excess of $450 million and no debt," he said. "While we were disappointed about being below our Q4 revenue guidance, albeit by a small amount, we feel positive about the future for F5."