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Blue Coat Fades

The quarter is frayed and the outlook unsightly.
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Blue Coat


faded 10% late Tuesday after the Web security outfit posted disappointing numbers.

The Sunnyvale, Calif., company made $3 million, or 20 cents a share, for the third quarter ended Jan. 31, up from the year-ago $267,000, or 2 cents a share. Revenue rose to $35.5 million from $24.7 million a year earlier.

Excluding one-time items, earnings on a so-called non-GAAP basis were 21 cents a share, 6 cents short of the Thomson Financial analyst consensus estimate. Analysts were looking for revenue of $38.6 million.

"We are disappointed that the third-quarter results did not achieve our expectations. The shortfall in revenue is due in significant part to two orders that did not close during the quarter," said CEO Brian NeSmith. "Although the company has grown market share in the proxy appliance market, we are reaching levels at which any further gains in market share will occur more slowly. In addition, we see signs of slower growth within the proxy appliance market. We believe that our strong position in the proxy appliance market and our continued investments in technology and resources will enable us to extend our leadership within the market for secure content and application delivery."

Blue Coat guided to pro forma earnings of 8 cents a share for the fourth quarter, where analysts were looking for 26 cents, on revenue of $35 million, where Wall Street expected $41 million.

Late Tuesday, Blue Coat slid $2.45 to $22.05.