* Akamai Q1 revenue $240 mln vs Street view $230 mln
* Q1 EPS excl items $0.35 vs year-ago $0.31
* Q2 sales, EPS outlook also exceed expectations
* Shares jump nearly 9 pct after-hours
* Galleon probe ends, employee in question was not exec
(Updates with CEO and analyst's comments, latest share price)
By Ritsuko Ando
NEW YORK, April 28 Akamai Technologies Inc
(AKAM.O) posted quarterly results and an outlook that beat
expectations as more businesses sought its help in delivering
online entertainment, soothing concerns about growing price
Akamai, which supports online media companies by navigating
less-congested routes over the Web and whose customers include
Apple Inc (AAPL.O) and News Corp's (NWSA.O) MySpace, said its
first-quarter sales rose 14 percent from a year earlier to $240
Analysts had expected $230 million, according to Thomson
Reuters I/B/E/S. Akamai shares jumped nearly 9 percent in
extended trade on Wednesday.
The company's outlook for second-quarter revenue of $236
million to $246 million also exceeded Wall Street's forecast of
Chief Executive Paul Sagan cited high-definition (HD) video
services as a key growth driver. Akamai has helped stream live
events like the Vancouver Olympics, U.S. March Madness
basketball and Masters golf tournaments.
"HD was a piece of the pleasant surprise and will be a big
driver for us over the years," he said.
"Our live events distributed over the Internet in HD,
events such as the Masters and March Madness, these are
demonstrating the ability to increasingly reach audiences in
new and innovative ways."
Net profit rose to $40.9 million from $37.1 million a year
earlier. Earnings excluding special items was 35 cents a share,
exceeding the average Street forecast of 31 cents.
For the current quarter, it forecast earnings excluding
items of 32 cents to 34 cents a share, above the Street's 31
Analysts said the results helped ease concerns about
increasing competition from traditional rivals like Limelight
Network Inc (LLNW.O) and Level 3 Communications Inc LVLT.O as
well as from new market entrants like AT&T Inc (T.N). Akamai
has said it would cut prices to win more business.
"They're obviously seeing good volume there, and it's
offsetting the price cutting," said Donna Jaegers, a senior
analyst at D.A. Davidson & Co.
"I'd been recommending Limelight and been neutral on Akamai
because I thought Limelight might steal their momentum ... but
it's certainly not having an impact on Akamai," she said.
Akamai shares rose nearly 9 percent to $36.10 after-hours,
after closing down 1.5 percent at $33.18 on Nasdaq. Shares in
Limelight rose slightly, while those of Level 3 were
Sagan said pricing pressure was nothing new, and that the
company was managing costs to keep up its margins and bottom
line. Its adjusted margin for the quarter was 49 percent, up 1
point from a year earlier.
"Pricing pressure has always been there. So it remains a
constant," he told Reuters in an interview.
He also told Reuters the company had concluded an internal
investigation on the Galleon insider trading scandal. One of
its employees was linked to the case, and Sagan said that
person was no longer with the company.
"The employee in question was not an executive," he said.
He declined to name the individual.
(Reporting by Ritsuko Ando; Editing by Richard Chang)