By Tess Stynes
F5 Networks Inc. (FFIV) named company insider Manny Rivelo as
its new president and chief executive starting in July, succeeding
current CEO John McAdam, who is retiring from the roles.
The company also reported that its earnings rose 23%, led by
improved sales to customers in the U.S. during the quarter ended in
March.
However, shares fell 3.3% to $116.40 in recent after-hours
trading as the company's outlook for the current quarter was mostly
below expectations.
The company said Mr. Rivelo joined F5 in October 2011 and has
been responsible for the company's strategic development, product
management and global marketing strategy, expanding F5 beyond its
data center roots. His previous experience include senior
management roles at Cisco Systems Inc. (CSCO).
Mr. McAdam will become chairman of the company, also starting in
July. Current Chairman Al Higginson will remain on the board as
lead independent director.
For the quarter ending June 30, the company forecast per-share
earnings of $1.57 to $1.60 and revenue of $475 million to $485
million. Analysts polled by Thomson Reuters expected per-share
profit of $1.59 and revenue of $489 million.
F5 and other networking companies have had to contend with
growing competition from cloud-computing providers. To deal with
revenue pressure, F5 has broadened its offerings with a slate of
new products and started a tiered pricing program. The company also
has benefited for strong demand for security products.
Mr. McAdam said Wednesday that revenue in the latest quarter
reflected growth in sales to U.S. service providers and enterprise
customers.
"The region's strong performance was underpinned by a rebound in
both the number and total dollar amount of deals greater than $1
million," he stated. In contrast, sales growth in EMEA and APAC
were below expectations, he added.
For the period ended March 31, F5 Networks reported a profit of
$85.7 million, or $1.18 a share, up from $69.6 million, or 91 cents
a share, a year earlier. Excluding stock-based compensation and
other items, per-share earnings rose to $1.59 from $1.27. Revenue
increased 12% to $472.1 million.
F5 Networks had forecast per-share earnings of $1.48 to $1.51
and revenue of $465 million to $475 million.
Write to Tess Stynes at tess.stynes@wsj.com
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