Akamai Q4 beats as demand for online content soars

Reuters News
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Posted: Feb 08, 2012 4:58 PM
Akamai Q4 beats as demand for online content soars

(Reuters) - Internet content delivery company Akamai Technologies Inc posted a fourth-quarter profit above analysts' expectations, helped by growing demand for online content, sending its shares up 12 percent in trading after the bell.

"It was the best quarter in the company's history with top-line, bottom-line and quarter-over-quarter growth," Chief Executive Paul Sagan told Reuters.

For the fourth quarter, Akamai earned $60 million, or 33 cents a share, compared with $52.5 million, or 27 cents a share, a year ago.

Excluding items, the company, which helps Apple Inc and Netflix Inc deliver online content by avoiding congestion on the Web, earned 45 cents a share.

Revenue at the company, which competes with Level 3 Communications and Limelight Networks, rose 15 percent to $324 million.

Analysts were expecting earnings of 40 cents a share, excluding items, on revenue of $311.3 million, according to Thomson Reuters I/B/E/S.

Akamai's technology is crucial for delivering high-definition video as online services like Netflix and Hulu explode in popularity, but competition in its market is growing.

In December, the company acquired rival Cotendo, which makes software to speed up web and mobile sites, for $268 million to strengthen its web acceleration business. The acquisition added clients such as Facebook, Zynga Inc, Google Inc and AT&T Inc. [ID:nL3E7NM434]

Shares of the Cambridge, Massachusetts-based company, which have gained more than 80 percent in value since touching a year-low in October, were at $38.63 in trading after the bell. They closed at $34.44 on Wednesday on the Nasdaq.

(Reporting by Supantha Mukherjee in Bangalore; Editing by Maju Samuel, Unnikrishnan Nair)