Why Akamai Technologies Tanked

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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 Akamai Technologies (NAS: AKAM) tanked today by 13% after the company reported first-quarter earnings.

So what: Revenue rose 16% to $319 million, with adjusted earnings per share of $0.41. Both figures beat expectations, but there were still a couple other announcements holding back shares: guidance and the departure of CEO Paul Sagan.


Now what: Next quarter's profit is expected to be $0.36 to $0.38 per share, which is short of the $0.39 per share Street consensus. Sagan intends to transition out of his roles as president and CEO by the end of 2013, although he'll stay on until the company finds a successor. Those two uncertainties are offsetting the relatively solid quarter that Akamai just completed.

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At the time this article was published Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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