UPDATE 2-Akamai 4th-quarter profit beats Street

* Q4 EPS ex-items 46 cents versus 43 cents Wall St view

* Revenue beat expectations

* Sees Q1 rev $224 mln to $233 mln vs. Street’s $228.1 mln

* Shares decline 4.6 percent after earnings report
(Adds outlook, analyst comments, updates stock price)

SAN FRANCISCO, Feb 3 (BestGrowthStock) – Internet content delivery
company Akamai Technologies Inc (AKAM.O: ) posted
stronger-than-expected fourth-quarter results, but its shares
slipped after the company delivered a revenue forecast that was
in line with Wall Street expectations.

Shares of Akamai, which have surged more than 57 percent
since September, were down $1.21, or 4.6 percent, at $25.29 in
after-hours trade on Wednesday.

“I think people would have probably liked to have seen
more, especially with the upside in Q4,” said Wedbush Morgan
Securities analyst Kerry Rice, referring to Akamai’s forecast
of $224 million to $233 million for first-quarter revenue. The
midpoint of the guidance was roughly in line with the $228.1
million expected by analysts polled by Thomson Reuters
I/B/E/S.

But Rice said that the company’s overall results were
strong and that he was puzzled by the stock reaction.

“It seems to be a trend this quarter with earnings:
companies that are strong, sell off on the news,” Rice said,
citing investor reaction after solid quarterly financial
results from Google Inc (Read more about Google Stock Analysis) (GOOG.O: ) and Microsoft Corp (MSFT.O: ).

Akamai, which helps companies deliver Internet content such
as video by navigating less-congested routes over the Web, said
e-commerce customers provided the strongest growth during the
fourth quarter thanks to a strong online holiday sales season.

Apple Inc (Read more about Apple stock future.) (AAPL.O: ) and News Corp’s (NWSA.O: ) MySpace use
Akamai’s services to deliver online music and videos to
consumers, and Akamai said it expanded its total roster of
customers with recurring service contracts by 9 percent year
over year.

Investors have been concerned that Akamai may be hit by
slower revenue and growing pricing pressure. In addition to
traditional rivals like Limelight Network Inc (LLNW.O: ), it
faces competition from new market entrants like AT&T Inc
(T.N: ).

In a phone interview with Reuters, Chief Executive Paul
Sagan said he expected pricing pressure to continue in the
coming year. He said price cuts were not unusual in the
industry and would help increase the proliferation of
high-definition online video among customers.

“The goal is to actually drive the unit price down,” Sagan
said. “That works as long as we keep managing our costs,” he
added.

Sagan said the company was not providing an official
outlook for the 2010 year but said the company’s goal was to
increase revenue at a double-digit pace. Analysts were looking
for $942.6 million of 2010 revenue, which would represent 9.6
percent growth.

“It’s still a difficult environment,” Sagan noted.

Fourth-quarter revenue rose 12 percent to $238.3 million
from $212.6 million in the year-earlier period. Analysts were
looking for $233.6 million.

The company said net profit slipped to $40.1 million, or 21
cents a share, from $40.5 million, or 22 cents a share, a year
earlier.

Excluding items, Akamai earned 46 cents a share, beating
the average Wall Street forecast of 43 cents, according to
Thomson Reuters I/B/E/S.

Akamai said EPS in the first quarter would range between 30
cents and 32 cents. Analysts were looking for 27 cents.

Investment

(Reporting by Alexei Oreskovic; Editing by Gary Hill and Steve
Orlofsky)

UPDATE 2-Akamai 4th-quarter profit (Read more your timing to make a profit.) beats Street