NEW YORK (AP) -- Shares of F5 Networks Inc. tumbled before Friday's opening bell after the company cut its outlook for the January-March quarter, citing disappointing results from its North American business.
Seattle-based F5, which sells information technology and networking equipment and services, said telecommunications contract bookings dropped compared with the October-December quarter and the same period in 2012. Revenue from business with the federal government also fell.
The company will report full results for its fiscal second quarter on April 24.
The news prompted William Blair analyst Jason Ader to cut his rating for the company's stock to "Market Perform" from "Outperform." Adler said that while the company insists that the shortfall was mainly the result of timing, it appears that the company is starting to feel competitive pressures. He's also skeptical of F5's ability to expand its security business, which is also competitive.
Citi analyst Kevin Dennean also cut his rating for F5 to "Neutral" from "Buy" and reduced his price target by $45 to $80.
In premarket trading, F5 shares dropped $16.44, or 18 percent, to $73.98. Shares have ranged from $81.07 to $139.20 in the past 12 months.
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