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F5 Misses on Top, Bottom

It guides the current quarter lower.
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Updated from 4:22 p.m.



said second-quarter earnings rose a less-than-expected 33% from a year ago, as a slowdown in orders from the U.S. government depressed revenue at the end of the quarter.

The maker of equipment for Internet traffic management earned $16.1 million, or 39 cents a share, in the quarter, compared with $12.1 million, or 31 cents a share, a year earlier. Excluding stock options expenses, F5 earned 49 cents a share in the latest quarter, a penny shy of the Thomson First Call consensus earnings estimate.

Second-quarter sales rose 39% from a year ago to $94.1 million, missing Wall Street forecast by $400,000. Product revenue was $72.8 million, up from $53.3 million, while services revenue was $21.3 million, up from $14.4 million.

"As expected, we saw strong growth in Japan, which achieved its highest quarterly revenue to date. In addition, both EMEA and Asia Pacific delivered solid sequential growth," F5 said. "The one area where we saw marked softness during the quarter was in our North American business, which was down sequentially due to a slowdown in our U.S. federal business during the last few weeks of the quarter. Excluding US Federal revenue, North American revenue was up sequentially from the prior quarter."

For the third quarter, F5 expects to earn 50 cents or 51 cents a share before options expense on $96 million to $98 million in revenue. Analysts were forecasting earnings of 52 cents a share on sales of $98.5 million. The outlook reflects "continued sequential growth tempered by seasonal softness that characterizes the first quarter of Japan's fiscal year," the company said.

F5 shares closed at $65.47 Thursday, up 15% for the year. In after-hours trading, the stock plunged $11.70, or 18%, to $53.77.