Stock compensation is a standard part of compensation packages within tech companies. That will happen whether or not there is a buyback program. So while a buyback might only offset stock option/RSU grants - it is still better (in terms of dilution) than doing no buyback or a smaller buyback.
Welp...seems to be working today, anyway.
While a stock buyback will not counter weak financials - holding everything else constant - it is anti-dilutive. Which is undeniably - a good thing for shareholders and the stock price.
Ok, I answered my own question. This IS new news. This is a new partnership with Cisco - and a meaningful one in my view. I don't know why it was done so quietly; i.e., without a press release. Cisco must not have wanted it to be high profile. Perhaps another partner is losing out to F5 in this deal? I suspect F5 will talk about this at their upcoming analyst day.
Anyway, thanks again rf for posting it here.
In a news vacuum, I'm guessing the sell-off is more technical than anything else. And the last earnings release - while good, was a bit disappointing from a product revenue growth standpoint. So until there's more evidence that the product refresh is going to translate into a reacceleration of product rev growth, the weaker hands are going to react to the fear of a falling stock price.
Funny - when someone says "trust me" - it usually means the exact opposite. Case in point here.
What mgmt actually said is that they are investing in growing their consulting business - which helps them push more high margin product. Consulting carries lower margin, so the increase in the lower margin business could have a slight negative impact on gross margin - based on mix. But as it is incremental revenue, it means an increase in gross profits, operating margin, and EPS.
In terms of operating margin, the company expects low 30's for Op margin in the 1H'14, and high 30's in the 2H'14 - which is in line-to-above FFIV'S historical operating margins.
....it's a whoooooole 'nother thing to be short at $86.
I would not want to be holding a short position in the $86's at the close tonight. IMHO.....
well, if you think Cramer knows what he's talking about, it's a buy. Here's what he said on Oct 3:
""And I want you to put F5 Networks right at the top of your list," he said."
He concurred with Piper Jaffray's report that F5 will not miss earnings this quarter, and that their new product refresh has them set up for growth through 2014.
VMW had a great quarter - and provided a strong outlook. So I think FFIV will do the same. I believe today is a gift from the shorts, who will be scrambling after hours today. I think it's a good thing that some air has been taken out in advance of release - and shorts are piling on today. It's setting up for a stronger positive reaction if they are indeed an analog of VMW. And, as Cramer said a couple weeks ago - they've got a new generation of products that sets up well for the coming year.