NEW YORK (AP) -- Shares of F5 Networks Inc. rose Thursday despite the company's disappointing first-quarter results.
THE SPARK: F5 sells information technology and networking equipment and services, and it reported its fiscal first-quarter results after the market closed on Wednesday. The company said its quarterly net income grew despite lower sales to the U.S. government and a decline in sales in Japan. Its net income and revenue were both a bit lower than Wall Street expected.
However F5 said it is preparing to launch a series of new products over the next two quarters, and said the new items will add to its revenue and expand its markets.
THE BIG PICTURE: The Seattle company also said it expects greater sales in the second quarter than in the first. F5 said the uncertainty connected to the fiscal cliff debate hurt its sales to the U.S. government during the first quarter, but executives still feel good about the state of its government business, saying its sales pipeline "remains very strong."
F5 said its new products should also boost sales in Japan. The company said sales in other American markets and Asia-Pacific were strong during the December quarter.
THE ANALYSIS: Stifel Nicolaus analyst Sanjiv Wadhwani maintained a "Hold" rating on the stock. He said he is uncertain about F5's longer-term results, but for now he expects its growth to pick up.
"Management sounded confident on the new appliance upgrades that are starting to come to the market and believes that the company is likely to show acceleration in growth starting in the second half of fiscal year 2013," he wrote in a note to clients.
SHARE ACTION: F5 stock rose $4.38, or 4.7 percent, to $103.46 in afternoon trading. The company's shares remain down about 26 percent from the 52-week high of $139.46 reached in early April.