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S&P 500 (NYSE:SPY) component Akamai Technologies, Inc. (NASDAQ:AKAM) will unveil its latest earnings on Wednesday, October 24, 2012. Akamai Technologies provides a distributed computing platform for accelerating and improving delivery of content and applications over the Internet. The company also offers solutions that enhance tools that people use for business transactions. .
Akamai Technologies, Inc. Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average estimate of analysts is for net income of 29 cents per share, a rise of 16% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 27 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 29 cents during the last month. For the year, analysts are projecting profit of $1.23 per share, a rise of 5.1% from last year.
Past Earnings Performance: The company’s quarterly results have come in above estimates for the last three quarters. Last quarter, the company booked net income of 29 cents per share versus a mean estimate of profit of 26 cents per share.
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Stock Price Performance: Between July 25, 2012 and October 18, 2012, the stock price rose $9.03 (32%), from $28.25 to $37.28. It saw one of its worst periods between November 15, 2011 and November 23, 2011 when shares fell for seven straight days, dropping 10.8% (-$3.18) over that span. The stock price saw one of its best stretches over the last year between February 6, 2012 and February 13, 2012, when shares rose for six straight days, increasing 15.6% (+$5.20) over that span.
Wall St. Revenue Expectations: On average, analysts predict $338.6 million in revenue this quarter, a rise of 20.1% from the year-ago quarter. Analysts are forecasting total revenue of $1.37 billion for the year, a rise of 18.1% from last year’s revenue of $1.16 billion.
A Look Back: In the second quarter, profit fell 7.7% to $44.2 million (24 cents a share) from $47.9 million (25 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 19.6% to $331.3 million from $277 million.
The company enters this earnings announcement with substantial revenue momentum. The company has averaged year-over-year revenue growth of 15.1% over the last four quarters.
An income boost this time around would be welcome news after profit declines in the past two quarters. Net income dropped 14.6% in the first quarter and then again in the second quarter.
Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 4.56 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 4.57 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 11.7% to $165.9 million while assets rose 11.3% to $756.6 million.
Analyst Ratings: There are 11 out of 21 analysts surveyed (52.4%) rating Akamai Technologies a buy.
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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)
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