ROUNDUP: Riverbed Technology Cuts Q2 Outlook; Stock Down
(dpa-AFX International Compact Via Acquire Media NewsEdge) WASHINGTON (dpa-AFX) - Network equipment maker Riverbed Technology Inc (RVBD), Monday slashed its revenue outlook for the second quarter due mainly to weaker-than-expected sales in North America.
Riverbed shares were down a near 5 percent in morning trade on the Nasdaq.
Riverbed now expects second-quarter sales of $264 million to $265 million, down from prior guidance of $274 million to $280 million. The company now expects adjusted earnings for the quarter to come in at the lower end of its guidance of $0.26 to $0.28 per share.
Analysts polled by Thomson Reuters currently expect sales of $277.4 million and earnings of $0.27 per share for the quarter. Analysts' estimates typically exclude special items.
"Second quarter sales were below our expectations, principally in North America, as we experienced longer sales cycles on some of our larger and more complex deals," said CEO Jerry Kennelly, adding the company is hopeful of meeting targets for rest of the year.
Kennelly also said the company prudently managed costs during the second quarter and focused on achieving operating leverage.
San Francisco, California-based Riverbed has been striving to fend off a hostile takeover bid from activist hedge fund Elliott Management Corp. Elliott owns about 10 percent stake in Riverbed.
Earlier today, Elliott reiterated its $21 per share all-cash takeover offer for Riverbed. Elliott was critical of Riverbed's second-quarter guidance. "Riverbed's poor performance this quarter reveals its decision to stonewall prospective buyers to be a serious and costly mistake," the hedge fund said.
RVBD is trading at $19.40, down $0.95 or 4.67%, on a volume of 2.5 million shares.
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