Riverbed expects profit below estimates as core business slows
(Reuters) - Network gear maker Riverbed Technology Inc's (RVBD.O) quarterly profit fell 76 percent on costs associated with its $1 billion acquisition of Opnet Technologies Inc, and the company forecast current-quarter profit below estimates.
Shares of the company fell 9 percent in extended trading, after closing at $20.10 on the Nasdaq on Thursday.
Riverbed expects a profit of 23 cents to 24 cents per share, excluding items, on revenue of between $257 million and $266 million for the first quarter.
Analysts were looking for an adjusted profit of 25 cents per share on revenue of $263.3 million, according to Thomson Reuters I/B/E/S.
"The (sequential) growth rate in the wide-area network (WAN) business is slower than what investors were hoping for," FBN Securities analyst Shebly Seyrafi told Reuters.
Riverbed is a market leader in the WAN business with its flagship Steelhead products that can boost data flow speeds by up to 100 times.
The business had so far been insulated from a cut in spending by telecom service providers, the biggest customers for network gear makers such as Riverbed and its rivals Juniper Networks Inc (JNPR.N) and F5 Networks Inc (FFIV.O).
The company bought Opnet, which makes software to manage traffic on networks, last year to counter the slowdown in its business.
Riverbed expects the Opnet acquisition, which it closed in the fourth quarter, to contribute $45 million to $50 million revenue in the current quarter.
The company's net income fell to $4.8 million, or 3 cents per share, in the fourth quarter, from $20.2 million, or 12 cents per share, a year earlier.
Acquisition-related costs rose to $13.2 million, from $1.1 million.
Excluding items, the earnings were 29 cents per share.
Revenue rose 17 percent to $237 million.
Analysts expected an adjusted profit of 29 cents per share on revenue of about $235 million.
(Reporting by Neha Alawadhi in Bangalore; Editing by Maju Samuel and Sriraj Kalluvila)