Akamais (AKAM) Q2 Earnings: Is Disappointment In Store?
Zacks Investment Research | Jul 20, 2017 10:51PM ET
Akamai Technologies Inc. (NASDAQ:AKAM) is set to release second-quarter 2017 earnings on Jul 25. Notably, the company has beaten the Zacks Consensus Estimate in three of the trailing four quarters, with an average positive surprise of 1.49%.
Last quarter, the company posted a positive earnings surprise of 1.92%. Adjusted earnings (including stock-based compensation expense and amortization of capitalized stock-based compensation) of 53 cents per share beat the Zacks Consensus Estimate by a penny.
Moreover, revenues of $609.2 million beat the Zacks Consensus Estimate of $605 million. It rose almost 7.3% from the year-ago quarter (up 8% adjusted for foreign exchange) but declined 1.1% from the previous quarter.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Akamai shares have massively underperformed the S&P 500 on a year-to-date basis. While the index gained 10.7%, the stock lost 21.5%.
The underperformance can be attributed to headwinds related to do-it-yourself (DIY) initiatives by large Internet companies (Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB), Google (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), and Netflix (NASDAQ:NFLX)), which are hurting its media business. Moreover, intensifying competition and pricing pressure are other concerns.
Further, continuing investments are also expected to hurt EBITDA margin, which is expected to touch the lower end of 37-39% range in the second quarter. Foreign exchange fluctuations are also likely to weigh heavily on its top line.
Additionally, newly launched products like Bot Manager, Image Manager, Enterprise Application Access (EAA) and the Enterprise Threat Protector (ETP) are expected to take some more time to contribute positively to top-line growth.
Nevertheless, Akamai’s strong foothold in the web applications domain apart from the rising demand for cloud infrastructure solutions, security, mobile products and online video is a key catalyst.
Akamai Technologies, Inc. Price, Consensus and EPS Surprise
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