Akamai shares drop on disappointing Q2 outlook

Akamai Technologies saw its shares dive nearly 13 per cent in after-hours trading on Tuesday after its second-quarter forecast fell short of Wall Street’s expectations.

The US-based content delivery network and cloud services provider said it expects revenue for the current quarter to come in between $597 to $609m, versus the $622.9m that analysts surveyed by Bloomberg are expecting. Earnings per share, adjusted to exclude special items, are expected to come in between 59 cents and 61 cents a share, missing the 64 cents that Wall Street had predicted.

The guidance was given by Akamai chief financial officer James Benson during an earnings call with investors following the after-market release of its first quarter earnings, which came in ahead of analysts’ predictions.

For the quarter, earnings per share were 46 cents, versus estimates of 45 cents, on net income from operations of $80.9m, ahead of the $79.2m that Wall Street was looking for. Revenue for the quarter increased 7 per cent year-over-year to $609.23m, compared to expectations for $604.7m.

Akamai was the latest tech company to dinged by investors following weak guidance on Tuesday, with Twilio shares falling nearly 30 per cent after it slashed its full-year outlook.