Akamai raises forecast on cloud security, content delivery demand

(Reuters) - Akamai Technologies Inc beat Wall Street’s estimates for second-quarter results and raised full-year forecast on Tuesday, boosted by strong demand for its cloud security services and growth in its traditional business of speeding up media content delivery through the web.

Chief Executive Officer Tom Leighton told Reuters he is optimistic that the content delivery network provider will have stronger growth in 2020 as some premium offers come online.

The streaming market is set to become crowded as Apple Inc, AT&T’s WarnerMedia and Comcast Corp plan to roll out new services. Walt Disney Co’s streaming service Disney+, which it has priced below Netflix, is set to launch in November.

Leighton said Akamai has good relationship with companies including Disney, AT&T, Comcast and Apple.

The company raised its 2019 revenue forecast to between $2.84 billion and $2.87 billion and adjusted earnings per share to $4.23 to $4.30. Its earlier forecast for revenue was $2.82 billion to $2.86 billion and $4.05-$4.20 of earnings per share.

Akamai’s media and carrier division, which includes media delivery business, posted a 4% rise in revenue to $325 million in second quarter, as more people use smartphones and computers to download games, videos and software.

Leighton also said the company benefited from the ICC Cricket World Cup and the Indian Premier League (IPL), a professional cricket league.

Revenue from the security business, which helps data centers operate and deliver content securely, jumped 32% to $205 million.

Net income rose to $113.9 million, or 69 cents per share, in the three months ended June 30, from $43.1 million, or 25 cents per share, a year earlier when the company paid a $50 million endowment to Akamai Foundation.

On an adjusted basis, the company posted earnings per share of $1.07, above estimates of $1, according to IBES data from Refinitiv.

Revenue rose 6.4% to $705.1 million, beating estimate of $695.8 million.

Shares of the company rose 1.7% to $85.50 in extended trading. The stock is up nearly 5% so far this year.

Reporting by Vibhuti Sharma in Bengaluru; Editing by Sriraj Kalluvila