What happened
Shares of Akamai Technologies (NASDAQ: AKAM) tanked today, down 12% from 11:15 a.m. EST, after the company reported fourth-quarter earnings. The results exceeded expectations, but Akamai also announced a reorganization.
So what
Fourth quarter revenue was $ 846 million, above the $ 829.5 million analysts expected. That resulted in adjusted earnings per share of $ 1.33, also slightly higher than the consensus estimate of $ 1.31. The Content Delivery Network (CDN) technology company bought back $ 72.5 million worth of stock in the past quarter.
Image Source: Getty Images.
“I am very proud of the way the Akamai team has supported our global customers and billions of Internet users who relied on the Internet more than ever before during the COVID-19 pandemic,” CEO Tom Leighton said in a statement. “As we look ahead to 2021, we expect to continue to invest in innovation and new products with the aim of accelerating our market leadership in security, edge computing and video streaming.”
What now
Akamai is streamlining its organizational structure by creating two new segments, the Security Technology Group and Edge Technology Group. The Security Technology Group will encompass Akamai’s security offering, while the Edge Technology Group will focus on Akamai’s core media delivery business. The company expects to record $ 7 million in restructuring costs in the first quarter.
Guidance calls for first quarter revenues of $ 822 million to $ 836 million, compared to Wall Street’s current expectation of $ 821 million. Adjusted earnings per share are estimated at $ 1.28 to $ 1.31 this quarter, with analysts modeling for $ 1.29.