U.S. Markets

Strong dollar hurts Akamai's profit forecast, shares fall

(Reuters) - Akamai Technologies Inc AKAM.O, whose service helps speed up delivery of online content, forecast current-quarter profit below analysts' expectations, citing a stronger dollar.

Shares of the company, which reported first-quarter profit in line with the average analyst estimate, fell 8 percent in extended trading on Tuesday.

A strong dollar hurt the company’s revenue and profit growth in the first quarter, Chief Executive Tom Leighton told Reuters.

Akamai, which delivers between 15-30 percent of all Web traffic and has customers ranging from Yahoo Inc YHOO.O to online home rental marketplace Airbnb, gets about a quarter of its revenue from outside the United States.

The dollar has risen about 23 percent against a basket of major currencies .DXY in the past year.

A stronger dollar is expected to hurt Akamai’s second-quarter revenue by $22 million, Chief Financial Officer Jim Benson said on a call.

The company had also benefited from FIFA World Cup in the second quarter of 2014.

Akamai forecast an adjusted profit of 55-59 cents per share and revenue of $532 million-$547 million for the current quarter.

Analysts on average were expecting earnings of 63 cents per share and revenue of $544.8 million, according to Thomson Reuters I/B/E/S.

Akamai’s net income rose 6.8 percent to $77.7 million, or 43 cents per share, in the first quarter ended March 31.

Excluding items, the company earned 61 cents per share, in line with the average analyst estimate.

Revenue rose 16.1 percent to $526.5 million, narrowly beating analysts’ expectations of $526.2 million.

The company’s revenue from media delivery solutions, which allow customers to deliver their online media content faster, rose 12 percent.

Revenue from its performance and security business, under which it offers cloud security products, rose 21 percent.

Shares of Akamai, whose rivals include Limelight Networks Inc LLNW.O and Level 3 Communications Inc LVLT.N, were trading at $70 after the bell.

Additional reporting by Supantha Mukherjee in Bengaluru; Editing by Kirti Pandey