Akamai Jumps on Strong Earnings, Buyback
CAMBRIDGE, Mass. (TheStreet) --Akamai Technologies(AKAM) shares are surging in extended-hours trading following better-than-expected first quarter earnings and a new $150 million buyback. It was also announced that CEO Paul Sagan would be leaving the company by the end of 2013.
The content delivery network (CDN) company reported first-quarter non-GAAP earnings of 41 cents a share on $319 million in revenue. Analysts polled by Thomson Reuters were expecting earnings of 38 cents a share on $310.45 million in revenue, up 16% year over year.
Akamai announced a $150 million extension of its buyback program, starting on May 1, 2012. The buyback will be funded by cash from operations, which was $93 million in the first quarter of 2012. At the end of the first quarter, Akamai had approximately $979 million in cash.
"Customers have responded positively to the product investments we have made to support mobile and cloud computing, Web security, and the shift of video and other rich media to the Internet," explained Sagan, in the company's press release.
Sagan is stepping down from the company after being appointed President in 1999 and becoming CEO in 2005. "With the Company demonstrating strong growth and business results, and as I approach my 15th year helping to lead the business, I have concluded this is the ideal time for the Board to select the Company's next leader to drive Akamai's continued growth for many years to come," Sagan said.
Shares of Akamai gained 2.68% during the regular session to close at $38.75. Shares are moving higher in extended-hours trading, up 2.45% to $39.70.
Interested in more on Akamai? See TheStreet Ratings' report card for this stock.
--Written by Chris Ciaccia in New York
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