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Akamai's revenue beat estimates on higher cloud service demand

Published 04/26/2016, 06:51 PM
© Reuters.  Akamai's revenue beat estimates on higher cloud service demand
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(Reuters) - Akamai Technologies Inc (NASDAQ:AKAM), a provider of services that speed up delivery of content over the internet, reported better-than-expected quarterly revenue and profit, helped by higher demand for its cloud security services.

Revenue from Akamai's cloud security business, which protects websites and data centers from cyber attacks, rose 46 percent to $80.7 million for the first quarter.

The company said on Tuesday it expects revenue for the current quarter to be between $566 million and $582 million and adjusted profit in the range of 62 cents to 65 cents per share.

Analysts on average were expecting revenue of $578.4 million and adjusted profit of 65 cents per share.

Akamai Chief Executive Tom Leighton said he expected the Olympics and U.S. presidential elections to lead to a sharp rise in Internet traffic this year.

The Cambridge, Massachusetts-based company is facing a slowdown in its media delivery business after its two largest customers, which the company declined to identify, recently switched to their own delivery networks.

As of Dec. 31, Akamai's customers included Apple Inc (NASDAQ:AAPL), eBay Inc (NASDAQ:EBAY) and Comcast (NASDAQ:CMCSA) Corp's NBCUniversal.

The company's net income fell to $74.9 million, or 42 cents per share, for the quarter ended March 31, from $77.7 million, or 43 cents per share, a year earlier.

Revenue rose to $567.7 million from $526.5 million.

Excluding items, the company earned 66 cents per share.

Analysts on average had expected earnings of 63 cents per share and revenue of $563.8 million, according to Thomson Reuters I/B/E/S.

The company's shares were up 0.1 percent at $52.73 in trading after the bell.

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