Akamai Stock Rises On Faster Earnings, Revenue Growth

Investor's Business Daily

Akamai Technologies (AKAM) said Q3 earnings rose 26% to 43 cents per share as revenue climbed 23% to $345 million, beating views.

Shares rose 6% in early after-hours trading Wednesday. The stock fell 1% to 36.11 during the regular session.

Analysts polled by Thomson/Reuters had estimated profit of 41 cents per share on revenue of $338.6 million.

"Akamai experienced its fourth consecutive quarter of accelerating revenue growth and delivered higher margins," said CEO Paul Sagan. "We continued to capitalize on our investments in cloud computing, Web security, mobile services and online video by expanding our product portfolio, while effectively managing the cost and efficiency of our network. These efforts paid off in both the company's top and bottom line performance.

Akamai is the biggest provider of content delivery network (CDN) services to media and entertainment companies. Its global network of computer servers stores copies of website content, bypassing traffic jams on heavily used Internet routes.

Akamai battles Limelight Networks (LLNW), Level 3 Communications (LVLT) and a new entrant in the CDN market, Amazon Web Services (AMZN), part of the online retailer.

Most of Akamai's profit growth is tied to nonvideo services. Akamai has expanded to the higher margin cloud infrastructure business, speeding up the delivery of software and business applications over the Web.

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