Akamai (AKAM) Q3 Earnings to Be Driven by Higher Traffic
Akamai Technologies, Inc. AKAM is set to report third-quarter 2017 results on Oct 24.
We expect the huge level of network traffic catered to by Akamai’s cloud delivery platform to be a key top-line booster for the company. A growing customer base and improvised portfolio of solutions are the other positives.
The Catalysts in Detail
Akamai stated that it witnessed high level of network traffic on its platform during the quarter, which is anticipated to be a major tailwind for the company’s revenues.
The company also added prominent names to its customer base during the third quarter with the likes of All Nippon Airways and Nintendo NTDOY.
While “All Nippon Airways” adopted Akamai’s flagship product, Image Manager, Nintendo launched its new game console and mobile gaming application simultaneously around the world via Akamai’s Media Delivery Solutions.
Moreover, NANA TV used technical services from MobileRider Networks LLC and Akamai for live streaming the North American total solar eclipse on Aug 21.
Akamai Technologies, Inc. Price and EPS Surprise
Akamai Technologies, Inc. Price and EPS Surprise | Akamai Technologies, Inc. Quote
The Zacks Consensus Estimate for third-quarter revenues is pegged at $610 million, indicating 4.5% increase year over year. Revenues in the second quarter came in at $609 million. Earnings are projected to be 59 cents per share, lower than 62 cents per share reported in the last quarter.
Notably, effective second-quarter 2016, Akamai started reporting its business under three main divisions – Media, Web and Enterprise and Carrier.
The Zacks Consensus Estimate projects Media division revenues to be around $271 million. Web division revenues are expected to be close to $327 million while Enterprise and Carrier division revenues are anticipated to be about $19.93 million for the third quarter.
We believe that rising demand for cloud infrastructure solutions, security, mobile products and online video and adoption of cloud services on a large scale by data centers pose significant growth opportunity for Akamai.
However, declining revenue contribution from large customers in the Internet Platform group namely, Amazon.com AMZN, Apple AAPL, Facebook, Google, Microsoft and Netflix due to their do-it-yourself (DIY) initiatives remains a concern for the company.
Akamai currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here
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