Riverbed Technology Q4 Results Match Estimates, Backs Q1 Outlook

(RTTNews) - Networking solutions provider Riverbed Technology, Inc. (RVBD) reported Thursday a profit for the fourth quarter that increased from last year, reflecting lower charges and double-digit revenue growth. Both adjusted earnings per share and adjusted quarterly revenues matched analysts' expectations. The company also reaffirmed it earnings and revenue forecast for the first quarter in a conference call.

Riverbed specializes in improving the performance of networks and and related applications, and helps optimize data traffic and bandwidth utilization across networks.

The Riverbed board had in mid-January rejected an unsolicited $19.00 per share or a total of $3.08 billion takeover offer from activist hedge fund Elliott Management Corp., saying that the proposal undervalued the company and was not in the best interests of its shareholders.

"Riverbed is executing well on a strategy to create sustained growth for our business, strategic value for our customers, and profitable returns for our shareholders," Chairman and CEO Jerry Kennelly said in a statement.

The San Francisco, California-based company reported net income of $8.40 million or $0.05 per share for the fourth quarter, higher than $4.78 million or $0.03 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $50.84 million or $0.31 per share, compared to $46.46 million or $0.29 per share in the year-ago quarter.

On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $0.31 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter increased 19 percent to a record of $283.26 million from $237.38 million, and adjusted revenue was $284.83 million, compared to $238.67 million in the same quarter last year. Nineteen Wall Street analysts had a consensus revenue estimate of $284.53 million for the quarter.

Product revenues grew to $169.81 million from $157.13 million, and support and services revenues increased to $113.45 million from $80.25 million in the year-ago quarter.

Gross profit for the quarter increased to $211.49 million from $179.09 million, while gross margins contracted 70 basis points to 74.7 percent from last year.

For fiscal 2013, the company reported a net loss of $12.42 million or $0.08 per share, compared to $54.60 million or $0.33 per share in the prior year. Excluding items, adjusted net income for the year was $169.31 million or $1.01 per share, compared to $163.34 million or $0.99 per share in the year ago.

Revenues for the full year increased 24 percent to a record of $1.04 billion from $836.86 million and adjusted revenue was $1.06 billion, compared to $839.68 million in the previous year.

Street was looking for full-year 2013 earnings of $1.01 per share on annual revenues of $1.06 billion.

Later in a conference call, the company reaffirmed its first quarter guidance provided in mid-January, continuing to expect adjusted earnings in a range of $0.21 to $0.23 per share, on projected adjusted revenues between $262 million and $268 million. Analysts expect the company to earn $0.23 per share for the quarter on revenues of $263.26 million.

"As customers increasingly adopt the full breadth of the Riverbed Application Performance Platform to achieve the benefits of location-independent computing and eliminate technical constraints from their business operations, we expect to increase our share of the $11 billion application performance infrastructure market," Kennelly added.

RVBD closed Thursday's regular trading session at $19.78, up $0.30 or 1.54% on a volume of 2.27 million shares. However, the stock lost $0.58 or 2.93% in after-hours trading.