October 22, 2009 / 8:42 PM / 10 years ago

UPDATE 2-Riverbed Q3 profit beats Street view, shares up

* Q3 adj EPS of 19 cents beat estimates by 4 cents

* Q3 revenue up 18 pct

* Sees Q4 adj EPS 18 cents, sales $104 mln-$107 mln

* Shares rise 2 percent after the bell (Recasts; adds outlook from conference call, updates share movement)

BANGALORE, Oct 22 (Reuters) - Riverbed Technology Inc RVBD.O, which provides technology that speeds up applications over networks, posted higher profit and forecast a strong fourth quarter as growing adoption of cloud computing fuelled demand for its products.

Third-quarter results also beat analysts’ expectations as margins improved and revenue grew across all verticals.

For the fourth quarter, the company forecast adjusted earnings of 18 cents a share on revenue of $104 million to $107 million.

Analysts were looking for earnings of 17 cents a share, excluding items, on revenue of $103.6 million, according to Thomson Reuters I/B/E/S.

“While there are signs of improvement, the sales environment remains challenging,” Finance Chief Randy Gottfried said on a conference call with analysts.

However, he added that Riverbed is experiencing strong customer additions, and existing customer rollouts continue every quarter.

Riverbed has been beefing up its presence in WAN optimization — a technology that speeds up applications over networks — as it takes on rivals like Cisco Systems (CSCO.O) and Blue Coat Systems BCSI.O.

The company reported third-quarter net income of $5.5 million, or 8 cents per share, compared with a net loss of $12.4 million, or 17 cents per share, a year earlier. Excluding items, it earned 19 cents a share.

Riverbed’s reported revenue rose 18 percent to $102 million.

Analysts expected earnings of 15 cents a share, excluding exceptional items, on revenue of $97.1 million, according to Thomson Reuters I/B/E/S.

Gross margins, excluding items, increased to 78 percent.

Shares of the San Francisco-based company were up 40 cents at $24 in trading after the bell. They closed at $23.60 Thursday on Nasdaq. (Reporting by Shrutika Verma in Bangalore; Editing by Aradhana Aravindan and Saumyadeb Chakrabarty)

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