Akamai, the web content delivery gorilla, will report Q1 2009 29-Apr-09 AMC.

Q4 2008 Conference Call Transcript

Edited snips: Akamai performed very well in Q4 capping another record year of significant revenue and earnings growth. Financial highlights for the fourth quarter includes, record revenue of $212.6 million, a 16% year-over-year increase and an 8% increase over the third quarter of 2008. Normalized net income of $82.2 million, or $0.44 per diluted share, that’s an 8% increase year-over-year and up 11% from Q3.

For the full year we grew revenue 24% year-over-year to $791 million. … normalized net income of $308.5 million or $1.66 per diluted share in 2008, that’s a 26% increase over 2007 and … $343 million of cash flow from operations, 43% of revenue during the year a testament to the strength of our business model

because of our significant deferred tax assets, we are paying cash taxes at an annualized rate of only about 2%

Outlook:  expect revenue of $205 to $212 million for Q1. [Analyst's current consensus in $208.25M] At the midpoint this represents the 11% year-over-year…expect normalized earnings per share for the first quarter of $0.39 to $0.41

Analysts Earnings Estimates

No change in 2009 estimates for the last sixty days. Akamai has traditionally underpromised and overdelivered, with actual earning beating consensus in 11 of the last 16 quarters.

Financial Reports

Q4 and 2008 Financial Press Release
2008 10K Annual Report

Akamai has a strong balance with $768,014k in cash, equivalents and marketable securities. Their only debt is $199,855k of 1% convertible notes with a conversion price of $15.45 per share. Akamai has excellent earnings and even stronger cash flow generation due to net operating losses and depreciation.

* Adjusted for $285.8 million income tax benefit. All figures in millions.

 More financial reports http://www.akamai.com/html/investor/financial_reports.html

Fusion Outlook

AKAM has been in a strong uptrend since the Nov 20 2008 low of $9.25 and has traded above the 50 day MA since Feb 30. The 50 dMA is close to crossing the 200 dMA . Technically AKAM is performing well and currently appears to be consolidating.

At yesterday’s close of $19.71 AKAM is trading at a forward 2009 P/E of 11.80. That is low for a company with Akamai’s growth potential. However, despite growing eps 72% per annum and revenue 37% for the last five years analysts see competition from Limelight (LLNW) and other CDNs slowing Akamai’s growth considerably. Analysts forecast less than 11% growth in earnings per annum for the next five years.

Despite the more than doubling in share price since November AKAM has considerable upside potential. I continue to hold a full position of AKAM and thus will not be buying more.

Behavioral - The computer says yes.

Previous Posts on Akamai

Related posts:

1. Akamai Technologies Inc. (AKAM) Q3 2009 Preview
2. Akamai Technologies Inc. (AKAM) Earnings Preview
3. Akamai Technologies falls out of favour
4. Akamai Accelerates Its Earnings in Q3 2009
5. Akamai Reports First Quarter 2009 Financial Results, Announces Share Repurchase
6. Amtrust Financial Services, Inc. (AFSI) Earning Preview Q1 2009