IB Net Payout Yields Model

F5 Networks Points the Way for Riverbed

After the close today, F5 Networks (FFIV) posted earnings that easily beat analyst estimates. Considering that F5 Networks has had a much rougher recession then Riverbed (RVBD) its encouraging to see the turnaround. F5 Networks reported an increase in their pipeline and movement of project on hold. All very promising for RVBD even though they aren't exactly the same business they somewhat track each other.

If you recall, RVBD had a disappoint Q2 even though sales were up 17%. They were hit somewhat by customers delaying projects and this report by FFIV hints that RVBD might see that those projects ramped up in Q3. That supposed buyout around $34 that we talked about last week might not be enough if RVBD shows similar results.

Comments from Reuters on F5s earnings report:

Oct 21 (Reuters) - Network-equipment maker F5 Networks Inc's (FFIV.O) quarterly profit beat market estimates on increased bookings and improved customer spending, sending its shares up 8 percent.

The company also gave a strong outlook for the first quarter.

Fourth-quarter net income increased to $28.4 million, or 36 cents per share, from $19.7 million, or 24 cents per share, a year earlier.

Revenue rose about 2 percent to $175.1 million.

Excluding items, earnings were 50 cents a share.

Analysts expected earnings of 41 cents a share, excluding exceptional items, on revenue of $163.9 million, according to Thomson Reuters I/B/E/S.

For the first quarter, the company -- whose rivals include Cisco Systems (CSCO.O) and Juniper Networks (JNPR.O) -- forecast earnings of 47 cents to 49 cents, excluding items. Analysts were expecting 43 cents a share.

Shares of the Seattle-based company, were up $2.87 at $44.40 in trading after the bell. They closed at $41.53 Wednesday on Nasdaq. They have gained about 84 percent this year. (Reporting by S. John Tilak in Bangalore; Editing by Saumyadeb Chakrabarty)


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