F5 Networks Plunges on Revenue Miss

NEW YORK ( TheStreet) -- Shares of F5 Networks ( FFIV) sold off in extended trading on Wednesday after the Seattle-based networking products developer came in just shy of Wall Street's revenue expectations for its fiscal first quarter and offered up a mostly in-line outlook for the current period.

That news might not initially seem so bad but after a running up more than 170% in the past 52 weeks, F5's stock is particularly vulnerable to the slightest missteps on the business side.

The stock was last quoted at $106, down 24%, on volume of roughly 4 million, according to Nasdaq.com. The volatile shares had already pulled back almost 5% since hitting a 52-week high of $145.76 on Jan. 13. F5 Networks was one of the best performing stocks in the S&P 500 in 2010, gaining more than 150%, second only to Netflix ( NFLX), which rose more than 270%.

The news was weighing on shares of some of F5's smaller competitors with Blue Coat Systems ( BCSI) losing almost 9%; Aruba Networks ( ARUN), down nearly 6%; Acme Packet ( APKT), sliding another 5%; Riverbed Technology ( RVBD), off 9%; and Juniper Networks ( JNPR), slipping 4%.

After Wednesday's closing bell, F5 Networks reported adjusted earnings of $72.2 million, or 88 cents a share, up from a year-ago equivalent profit of $41.4 million, or 52 cents a share, and ahead of the average estimate of analysts polled by Thomson Reuters for earnings of 83 cents a share.

On the top line, however, the company, whose products include applications to accelerate the loading of Web pages and manage remote access to virtual private networks, fell short with revenue of $268.9 million for its fiscal first quarter ended Dec. 31. That figure missed Wall Street's consensus view of $270.6 million.

"Coming off a very strong fourth quarter, the company achieved solid revenue and earnings growth in the first quarter of fiscal 2011," said John McAdam, the company's president and CEO, in a press release. "Product revenue was up nearly 44 percent from the first quarter of fiscal 2010, and service revenue grew more than 35 percent during the same period.

For its fiscal second quarter ending in March, F5 Networks set a non-GAAP generally accepted accounting principles earnings target of 84 to 86 cents a share with revenue projected to range from $275 million to $280 million. The current average analysts' projection is for a profit of 85 cents a share on revenue of $281.1 million in the March period.

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