Akamai Technologies (NAS: AKAM) is setting eight-month highs in aftermarket trading. The just reported fourth quarter was all that and a bag of chips.
Analysts were looking for adjusted earnings of $0.40 per share on $311 million in revenue. That would have been a modest 9% sales uptick and flat earnings compared to the year-ago period.
Instead, the online content delivery specialist presented $0.45 of non-GAAP earnings per share on sales of $324 million. Investors immediately rewarded the company with a 12% price jump.
Trading at nearly $39 a share, Akamai's stock has more than doubled in value from 52-week lows set in October. At the time, the company was under unprecedented competitive pressure as Level 3 Communications (NAS: LVLT) just bought Global Crossing, and investors feared that a price war might break out in the content delivery space.
But there's no evidence of an industry-wide, damaging pricing battle today. Akamai's sales grew 14.8% year over year, comfortably faster than the cost of sales at just 9.9%.
Management is actively reducing share counts with a generous buyback program that took 3 million stubs off the market in the fourth quarter. The company also just elevated James Benson, its own Vice-President of Finance, to the C-level CFO office with an effective date of March 1. His predecessor, J.D. Sherman, leaves Akamai after six years on the job to become COO of marketing-software upstart HubSpot. If investors are worried about the transition, their jitters are being overpowered by the roar of the financial results.
"We believe our Content Delivery and Cloud Infrastructure solutions are stronger than ever," said CEO Paul Sagan. That's not a bad foundation from which to launch another year or five of dramatic growth. Cloud computing is a game-changing revolution that's going on right now, and Akamai is smart to go all-in on that trend.
At the time thisarticle was published Fool contributorAnders Bylundholds no position in any of the companies mentioned. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check outAnders' holdings and bio, or follow him onTwitterandGoogle+. We have adisclosure policy.
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