NetScout Shares Jumped: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of service assurance and network performance management specialist NetScout (NAS: NTCT) were scouting out the stock market's peaks today, as investors boosted shares as much as 19% after the company announced its fiscal third-quarter results.

So what: What do investors want to know at earnings season? They want to know that their company performed at least as well as they -- and, maybe more importantly, Wall Street analysts -- had expected. In its third quarter -- which ended Dec. 31 -- NetScout managed to top estimates, logging $0.35 in adjusted per-share profit against the $0.33 that was expected.

Year over year, revenue grew 9%, led by a 12% increase in service sales. Product revenue was up 7%, but it showed an even more marked 21% jump from the company's fiscal second quarter.

Now what: Management narrowed the company's expectations for the full year now that it has only one quarter left to go. Revenue is seen clocking in between $305 million and $310 million, while non-GAAP earnings per share are expected to be between $1.07 and $1.11. On balance, the new ranges show management stepping back its expectations. However, current analyst expectations have the company earning $1.07 per share on $304 million in sales for the year, so management's new view is still above Wall Street's.

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At the time this article was published Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributorMatt Koppenhefferhas no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter,@KoppTheFool, or onFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.

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