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Infoblox shares surge on 4Q earnings

LOS ANGELES (AP) -- Investors drove shares of Infoblox Inc. sharply higher Friday, encouraged by the technology's latest quarterly earnings report.

THE SPARK: The company reported late Thursday that it returned to a profit in its fiscal fourth quarter, aided by strong demand for its data center technology. All told, Infoblox earned $1.5 million, or 3 cents per share, compared with a loss of $4.3 million, or 10 cents per share, in the prior-year quarter. Revenue surged 40 percent to $63.1 million as sales increased across all of its markets.

The quarter's results trumped Wall Street's expectations.

THE BIG PICTURE: Infoblox, based in Santa Clara, Calif., makes technology for data centers. The company, which went public in April of 2012, is benefiting from limited competition in a largely untapped area of the networking business.

THE ANALYSIS: Two UBS Investment Research analysts said in a research note Friday that they see plenty of growth potential in Infoblox's core product market, with new products serving as growth drivers.

They noted that Infoblox's new products are starting to gain traction, as reflected in fiscal 2013 sales growth accelerating by 50 percent versus the prior-year period.

UBS maintained a "Buy" rating on Infoblox, but raised its price target to $42 from $35.

SHARE ACTION: Up $5.70, or 16.2 percent, to $40.94 in afternoon trading. Shares are up more than twofold this year.