UPDATE 1-Federal spending worries weigh on Riverbed's forecast

Mon Oct 28, 2013 6:21pm EDT

* Expects 4th-quarter adj earnings/share $0.26-$0.27 vs est $0.27

* Sees adj revenue $270 mln-$276 mln vs est $283.7 mln

* 3rd-quarter revenue $262 mln vs est $267.4 mln

* 3rd-quarter adj earnings $0.26/share vs est $0.23

Oct 28 (Reuters) - Network equipment maker Riverbed Technology Inc forecast current-quarter revenue below analysts' estimates as it expects sales to the U.S. government to remain weak due to spending cuts.

The U.S. government's sequestration program, which involves spending cuts on federal projects, has hurt companies such as Riverbed. Sales to the government accounted for more than 10 percent of Riverbed's revenue in the third quarter ended Sept. 30.

"The general macroeconomic climate remains mixed, and we continue to have a conservative outlook regarding federal sales," Chief Financial Officer Ernie Maddock said in a post-earnings conference call.

The company said it expects fourth-quarter adjusted earnings of 26-27 cents on revenue of $270-$276 million.

Analysts on average were expecting earnings of 27 cents on revenue of $283.7 million, according to Thomson Reuters I/B/E/S.

The company, whose products boost data speeds on wide-area networks by up to 100 times, has been trying to diversify to counter a slowdown in its core business. Riverbed bought network traffic management software maker Opnet in 2012 as part of the plan.

Riverbed's net income fell 85 percent to $3.8 million, or 2 cents per share, in the third quarter from a year earlier.

Excluding items, earnings were 26 cents per share.

Revenue rose 20 percent to $262 million.

Analysts expected earnings of 23 cents per share on revenue of about $267.4 million.

Shares of Riverbed rose 8 percent in post-market trading after the company announced the results, but they failed to hold on to earlier gains after the current-quarter forecast. The stock, which closed at $14.35 on the Nasdaq, was up at $14.42.

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