Federal spending worries weigh on Riverbed's forecast

Reuters

* Expects 4th-quarter adj earnings/share $0.26-$0.27 vs est$0.27

* Sees adj revenue $270 mln-$276 mln vs est $283.7 mln

* 3rd-quarter revenue $262 mln vs est $267.4 mln

* 3rd-quarter adj earnings $0.26/share vs est $0.23

Oct 28 (Reuters) - Network equipment maker RiverbedTechnology Inc forecast current-quarter revenue belowanalysts' estimates as it expects sales to the U.S. governmentto remain weak due to spending cuts.

The U.S. government's sequestration program, which involvesspending cuts on federal projects, has hurt companies such asRiverbed. Sales to the government accounted for more than 10percent of Riverbed's revenue in the third quarter ended Sept.30.

"The general macroeconomic climate remains mixed, and wecontinue to have a conservative outlook regarding federalsales," Chief Financial Officer Ernie Maddock said in apost-earnings conference call.

The company said it expects fourth-quarter adjusted earningsof 26-27 cents on revenue of $270-$276 million.

Analysts on average were expecting earnings of 27 cents onrevenue of $283.7 million, according to Thomson Reuters I/B/E/S.

The company, whose products boost data speeds on wide-areanetworks by up to 100 times, has been trying to diversify tocounter a slowdown in its core business. Riverbed bought networktraffic management software maker Opnet in 2012 as part of theplan.

Riverbed's net income fell 85 percent to $3.8 million, or 2cents per share, in the third quarter from a year earlier.

Excluding items, earnings were 26 cents per share.

Revenue rose 20 percent to $262 million.

Analysts expected earnings of 23 cents per share on revenueof about $267.4 million.

Shares of Riverbed rose 8 percent in post-market tradingafter the company announced the results, but they failed to holdon to earlier gains after the current-quarter forecast. Thestock, which closed at $14.35 on the Nasdaq, was up at $14.42.

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