F5 Networks sees massive share plunge

The networking equipment vendor gets drubbed in the after hours as investors react to its first-quarter report.

By Kim Peterson Jan 19, 2011 5:52PM
Image: Arrow Down (© Kyu Oh/Photodisc/Getty Images)F5 Networks (FFIV) is getting killed in after-hours trading as investors express displeasure with the company's first-quarter earnings. Shares are down about 18% from the close price of $138.78.

Profit wasn't the problem for the networking equipment vendor. Instead, the company disappointed with its revenue and its forecast for the current quarter. F5 reported $55.7 million, or 68 cents a share, in net income, which was up dramatically from $29.3 million, or 36 cents a share, in the year ago quarter.

Once you take out the impact of stock-based compensation, F5 ended up beating analyst expectations of 83 cents a share by 5 cents. Not bad.

But the company said its quarterly revenue was only $268.9 million, a bit shy of the $271 million Wall Street wanted to see. That alone would have probably been OK with investors. But let's move on to guidance.

F5 said it expects profit at 84 cents to 86 cents for the second quarter on revenue of $275 million to $280 million. That's a little below analyst estimates of 85 cents on revenue of $281 million.

All in all, this wasn't a disastrous report. But F5 Networks has been on a huge run over the last year, as the chart shows. The intense sell-off in the after-hours is a clear sign that investors think this baby has peaked.
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