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Akamai (AKAM) to Report Q3 Earnings: What's in the Offing?
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Akamai Technologies, Inc. (AKAM - Free Report) is scheduled to release third-quarter 2018 results on Oct 29.
Notably, the content delivery network (“CDN”) and cloud infrastructure-service provider has delivered an average positive earnings surprise of 8.1% in the trailing four quarters.
Q2 at a Glance
In the second quarter of 2018, Akamai reported non-GAAP earnings of 83 cents per share beating the Zacks Consensus Estimate by 4 cents and surged 33.9% from the year-ago quarter.
Moreover, revenues of $662.8 million outpaced the Zacks Consensus Estimate of $662 million and increased 9.4% from the year-ago quarter (up 9% adjusted for foreign exchange).
For third-quarter 2018, Akamai envisions revenues between $656 million and $668 million. Management anticipates unfavorable foreign exchange and seasonal summer traffic to impact revenues.
Excluding Internet Platform Customers, revenues increased 11.5% year over year (up 10% adjusted for foreign exchange) to $618.7 million. Revenues from Internet Platform Customers were $44.1 million, down 13.9% year over year.
What to Expect?
For the third quarter, Zacks Consensus Estimate for earnings is pegged at 83 cents, representing growth of 33.9% from the year-ago quarter. Additionally, the Zacks Consensus Estimate for the revenues is pegged at $663.26 million, indicating year-over-year growth of 6.7%.
The Zacks Consensus Estimate for revenues excluding Internet Platform customers is estimated to be $620 million, above $571 million in the year-ago quarter. However, revenues from Internet Platform Customers are pegged at $43.6 million, down from $51 million in the prior-year period.
Factors at Play in Q3
Akamai is likely to continue witnessing high level of network traffic on its platform, which is a major tailwind.
Solid demand for Kona Site Defender, Bot Manager and Prolexic Solutions are anticipated to drive Cloud Security Solutions revenues. The traction gained by Enterprise Application Access and Enterprise Threat Protector is also a positive.
Robust adoption of Akamai’s Image Manager, mPulse and Digital Performance Management solutions are expected to boost Web Division revenues growth.
Synergies from Nominum and initiatives to improve traffic growth are likely to aid revenue growth in Media and Carrier Division.
The company introduced two new solutions for television distributors and broadcasters, namely Akamai Cloud Wrapper and Akamai Direct Connect in a bid to offer high-quality streaming performance in a cost-effective manner.
Further, Akamai, Etsy, Apple (AAPL - Free Report) and Swiss Re, entered into an agreement to build two new solar and wind energy farms in Virginia and Illinois. Lead by Apple, the new project is anticipated to produce 290 megawatts sufficient to power approximately 74,000 homes.
Akamai also announced partnership with Janrain. Notably, Janrain provides Customer Identity and Access Management ("CIAM") solutions. Per the terms of the partnership, Janrain Secure Edge will gain new integrated security capabilities to strengthen Janrain Identity Cloud.
Expansion of the security-product portfolio is anticipated to lower dependence on media delivery solutions. Further, rapid growth in security is expected to offset loss of large customers in the CDN space.
However, declining revenue contribution from large customers in the Internet Platform group remains a concern.
According to the Zacks model, a company with a solid Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chances of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
Akamai has a Zacks Rank #3 and an Earnings ESP of -0.60%, which makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combination
Here are a couple of companies which as per our model have the right combination of elements to post an earnings beat this quarter:
Herbalife LTD. (HLF - Free Report) has an Earnings ESP of +2.29% and a Zacks Rank #2. The company is slated to report third-quarter earnings on Oct 30.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Akamai (AKAM) to Report Q3 Earnings: What's in the Offing?
Akamai Technologies, Inc. (AKAM - Free Report) is scheduled to release third-quarter 2018 results on Oct 29.
Notably, the content delivery network (“CDN”) and cloud infrastructure-service provider has delivered an average positive earnings surprise of 8.1% in the trailing four quarters.
Q2 at a Glance
In the second quarter of 2018, Akamai reported non-GAAP earnings of 83 cents per share beating the Zacks Consensus Estimate by 4 cents and surged 33.9% from the year-ago quarter.
Moreover, revenues of $662.8 million outpaced the Zacks Consensus Estimate of $662 million and increased 9.4% from the year-ago quarter (up 9% adjusted for foreign exchange).
For third-quarter 2018, Akamai envisions revenues between $656 million and $668 million. Management anticipates unfavorable foreign exchange and seasonal summer traffic to impact revenues.
Excluding Internet Platform Customers, revenues increased 11.5% year over year (up 10% adjusted for foreign exchange) to $618.7 million. Revenues from Internet Platform Customers were $44.1 million, down 13.9% year over year.
What to Expect?
For the third quarter, Zacks Consensus Estimate for earnings is pegged at 83 cents, representing growth of 33.9% from the year-ago quarter. Additionally, the Zacks Consensus Estimate for the revenues is pegged at $663.26 million, indicating year-over-year growth of 6.7%.
The Zacks Consensus Estimate for revenues excluding Internet Platform customers is estimated to be $620 million, above $571 million in the year-ago quarter. However, revenues from Internet Platform Customers are pegged at $43.6 million, down from $51 million in the prior-year period.
Factors at Play in Q3
Akamai is likely to continue witnessing high level of network traffic on its platform, which is a major tailwind.
Solid demand for Kona Site Defender, Bot Manager and Prolexic Solutions are anticipated to drive Cloud Security Solutions revenues. The traction gained by Enterprise Application Access and Enterprise Threat Protector is also a positive.
Robust adoption of Akamai’s Image Manager, mPulse and Digital Performance Management solutions are expected to boost Web Division revenues growth.
Synergies from Nominum and initiatives to improve traffic growth are likely to aid revenue growth in Media and Carrier Division.
The company introduced two new solutions for television distributors and broadcasters, namely Akamai Cloud Wrapper and Akamai Direct Connect in a bid to offer high-quality streaming performance in a cost-effective manner.
Further, Akamai, Etsy, Apple (AAPL - Free Report) and Swiss Re, entered into an agreement to build two new solar and wind energy farms in Virginia and Illinois. Lead by Apple, the new project is anticipated to produce 290 megawatts sufficient to power approximately 74,000 homes.
Akamai also announced partnership with Janrain. Notably, Janrain provides Customer Identity and Access Management ("CIAM") solutions. Per the terms of the partnership, Janrain Secure Edge will gain new integrated security capabilities to strengthen Janrain Identity Cloud.
Expansion of the security-product portfolio is anticipated to lower dependence on media delivery solutions. Further, rapid growth in security is expected to offset loss of large customers in the CDN space.
However, declining revenue contribution from large customers in the Internet Platform group remains a concern.
Akamai Technologies, Inc. Price and EPS Surprise
Akamai Technologies, Inc. Price and EPS Surprise | Akamai Technologies, Inc. Quote
What Our Model Says
According to the Zacks model, a company with a solid Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chances of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
Akamai has a Zacks Rank #3 and an Earnings ESP of -0.60%, which makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With Favorable Combination
Here are a couple of companies which as per our model have the right combination of elements to post an earnings beat this quarter:
Ameren Corporation (AEE - Free Report) has an Earnings ESP of +8.65% and a Zacks Rank #1. The company is slated to report third-quarter earnings on Oct 31. You can see the complete list of today’s Zacks #1 Rank stocks here.
Herbalife LTD. (HLF - Free Report) has an Earnings ESP of +2.29% and a Zacks Rank #2. The company is slated to report third-quarter earnings on Oct 30.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>