What happened
Actions of Akamai Technologies (NASDAQ: AKAM) collapsed today, down 12% from 11:15 am EST, after the company reported fourth quarter earnings. The results exceeded expectations, but Akamai also announced a corporate reorganization.
And
Fourth-quarter revenue was $ 846 million, exceeding the $ 829.5 million in sales that analysts had expected. This resulted in adjusted earnings per share of $ 1.33, also slightly above the consensus estimate of $ 1.31. The content delivery network technology company (CDN) repurchased $ 72.5 million in shares during the quarter.
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“I am very proud of how the Akamai team supported our global customers and billions of Internet users who depended on the Internet more than ever during the COVID-19 pandemic,” said CEO Tom Leighton in a statement. “Looking ahead to 2021, we look forward to continuing to invest in innovation and new products with the goal of accelerating our market leadership in security, cutting-edge computing and video streaming.”
What now
Akamai is optimizing its organizational structure by creating two new segments, the Security Technology Group and the Edge Technology Group. The Security Technology Group will include Akamai’s security offerings, while Edge Technology Group will focus on Akamai’s core media distribution business. The company expects to record $ 7 million in restructuring charges in the first quarter.
The guidance predicts first quarter revenue of $ 822 million to $ 836 million, compared to Wall Street’s current expectation of $ 821 million. Adjusted earnings per share this quarter are forecast at $ 1.28 to $ 1.31, while analysts are modeling to $ 1.29.