Shares of Akamai Technologies Inc. shares soared Thursday after the company's first-quarter results exceeded market expectations and it posted a bright outlook.
THE SPARK: The company said late Wednesday that profit rose 65 percent to $71.5 million. Excluding one-time items, profit came in at 51 cents per share, while revenue increased 15 percent to $368 million. Analysts polled by FactSet were anticipating earnings of 47 cents per share on revenue of $358.1 million.
For the current quarter, Akamai expects adjusted profit of 44 cents to 46 cents per share on revenue of $368 million to $378 million. Analysts had predicted profit of 45 cents per share on revenue of $363.5 million.
THE BIG PICTURE: Akamai helps websites deliver video and other content to users. The increasing popularity of Internet video is helping drive its growth. In the most recent quarter, CEO Tom Leighton noted strong gains in its media delivery business and network cost controls.
THE ANALYSIS: Cowen analyst Colby Synesael said the traffic growth was driven by its large accounts, and that should continue in the current quarter.
Synesael, who has an "Outperform" rating on the stock, believes that Wall Street analysts are underestimating the company's long-term growth potential.
SHARE ACTION: Shares jumped $6.78, a nearly 19 percent increase, to $42.87 in late afternoon trading. The stock peaked at $43.68, its highest point since February 2011, earlier in the day.