Tag Archives: F5 Networks

Business, Finance, Occupation & Industry

Why Is My Stock Still Falling?

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By Rich Duprey, The Motley Fool

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Lousy job numbers and fears of global financial discord initially sent the Dow Jones Industrial Average tumbling 175 points on Friday, but the index proved remarkably resilient and bounced back to close down just 44 points at the end of the day.

However, the sell-off is starting again today and the two stocks below that closed sharply lower to end the week last week are also continuing their free fall today. 

A triumvirate of turmoil
Closely tied to the global financial situation is the unease investors are feeling toward National Bank of Greece as questions rose over its acquisition of Eurobank. The so-called “troika” of the European Union, European Central Bank, and International Monetary Fund are questioning the absorption because the combination of the two would make its assets almost equal to Greece‘s GDP and the equivalent of more than a third of all the deposits in Greek banks. Already considered “too big to fail,” their union would create substantial pressure if the financial turmoil spreads.

Greece‘s banks are in the middle of a recapitalization plan under the country’s bailout from the troika, and if the proposed synergies of this massive merger are not realized and National Bank of Greece runs into trouble, it would be nearly impossible to find a buyer for it should it fall apart because of its size.

That point became moot today as the two banks called off their merger because they couldn’t raise the necessary capital to complete the transaction. While National Bank of Greece fell a modest 8% on Friday, it’s down an additional 11% as of this writing. Despite saying that talks could always resume, both banks said they couldn’t guarantee they’d be able to sell 10% to private investors. It seems pretty clear the troika’s reservations doomed this deal’s chances.

F5 drops another fifth
After dramatically missing even its internal quarterly estimates, F5 Networks lost nearly 20% of its value Friday, falling to levels not seen since September 2011.

It preannounced earnings and indicated that its North American business was dragging down operations such that adjusted profits would come in somewhere between $1.06 and $1.07 per share on revenue of $350.2 million. That’s well below the consensus Wall Street view of $1.23 per share on $376 million in revenue, but also completely missing its own guidance of $1.21 to $1.24 per share on between $370 million and $380 million in revenue. That’s a near 15% miss on profits and an 8% skew on revenue.

Nomura Securities thinks it’s a company-specific issue, pointing to its new product lineup having several telecom-focused features that might have delayed purchasing decisions, which is reminiscent of what Riverbed Technologies went through last year as it began transitioning to a more diversified product line. This year is viewed as the time when it should gain some traction, though fourth-quarter results were less than impressive. 

Yet analysts are still downgrading the stock today, with Citigroup, Piper Jaffray, and Topeka Capital …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Wall Street This Week: All Eyes on Earnings

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By Reuters

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By Rodrigo Campos

The stock market‘s robust rally was slowing even before Friday’s jobs report, but the red flag sent up by the weak payrolls data makes the path to more gains less secure.

It means the bulls will have to look to earnings for a way to keep the rally going. The S&P 500 hit an all-time closing high on Tuesday, but lately defensive stocks have been leading the charge, and notable growth indexes are slipping.

This rotation has many thinking the long-awaited market correction is nigh. A 3 percent decline in theRussell 2000 index last week seemed to be a confirmation of the trend.

“Momentum I think has been slowing a bit, and it would be interesting to see if this is just a one-session sell-off,” Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston, said about Friday’s decline.

In the first quarter, the benchmark’s healthcare index added 15.2 percent and utilities gained 11.8 percent, besting the broad S&P 500’s 10 percent gain.

The transition into defensive stocks may respond to investors’ taking into account the effect of higher payroll taxes this year and the $85 billion in government spending cuts that started to trickle at the beginning of the year.

The shift is “a rotation into sectors less affected by a short-term slowdown in the consumer,” said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.

Earnings Hold the Key

Earnings season starts in earnest this week, with the highlight coming from JPMorgan Chase & Co and Wells Fargo & Co on Friday. Details on Wells Fargo‘s earnings will be dissected for clues on the health of the housing market.

Overall, S&P 500 earnings are expected to have risen 1.5 percent last quarter, down from a 4.3 percent gain expected at the start of the year, according to Thomson Reuters data.

Investors “are really waiting for the earnings season on balance to disappoint,” Zaro said.

Companies have caught up on the lowered expectations, and negative outlooks have been predominant ahead of earnings season. In fact, the negative-to-positive guidance ratio from S&P 500 companies is at its highest since the third quarter of 2001, according to Thomson Reuters data.

At 4.7, the ratio is the sixth-highest among 69 readings dating to 1996.

“Companies understand that since the economy is weak there’s no reason to be a hero and give guidance you can’t beat,” said Nicholas Colas, chief market strategist at the ConvergEx Group in New York.

F5 Networks was the latest and one of the most dramatic examples of lowered earnings expectations. The network equipment maker partly blamed lower government sales for its profit warning late on Thursday, which erased almost a fifth of its market value on Friday.

In past quarters, revenue beats have taken the focus off the …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Dow Bounces Back After Poor Jobs Report

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By Jeremy Bowman, The Motley Fool

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Well, it could have been worse. After lackluster employment reports on Wednesday and Thursday, the alarm bells sounded even louder this morning, when the Department of Labor reported that just 88,000 jobs were added in March. Still, the Dow Jones Industrial Average bounced back from an early 170-point loss to finish down just 41 points, or 0.3%, as many investors seemed to see the sell-off as a buying opportunity. It was the worst week of the year for the S&P 500 and Nasdaq, and for the Dow, its worst week since February, though it only fell 13 points.

The number of new jobs added was the lowest total since October, and comes after several months of strong job growth. In fact, the figures in January and February were revised upward by a total of 61,000, to 148,000 and 268,000. Economists are struggling to come up with an explanation for the sudden drop off, and have suggested that increases in the payroll tax and income taxes on the wealthy, as well as sequestration, have contributed to the weak labor market. Ninety-five thousand jobs were added in the private sector, while governments shed a net of 7,000 jobs, many of which were in the Postal Service. The unemployment rate dropped from 7.7%, to 7.6%, but the decrease was primarily the result of job seekers giving up on finding a job.

Cisco Systems was among the poorest performers on the Dow today, falling 2% after fellow network provider F5 Networks reported disappointing preliminary earnings, and fell 19% as a result. F5 missed its own revenue guidance by 7%, and also reported lower-than-expected earnings per share, while Radware, another industry peer, also reported poor preliminary results. For more information, see my colleague Evan Niu‘s coverage here.

American Express was the worst performer on the Dow, falling 2.1%, as the weak employment growth likely hurts the credit-card issuer more than most companies. The Jefferies Group also voiced some concerns about the lender heading into earnings season, and gave it a price target 10% below its current value. Total consumer borrowings jumped from $12.7 billion in January, to $18.1 billion to February, a trend that should favor the lender.

Meanwhile, Boeing bucked the overall trend, rising 1.4% after reporting a successful test flight of its troubled Dreamliner 787 jet, which had been grounded due to battery fires. The aircraft-maker now says testing has been completed, which leaves that 787 in the hands of regulators who originally ordered the composite jet grounded.

After a subpar week, investors can look forward to the beginning of earnings season, which could reverse the downward trend caused by poor employment numbers. Alcoa will be the first Dow stock to report earnings, releasing on Monday after hours. Analysts are expecting an EPS of $0.08 from the aluminum maker, which has been among the poorer performers on the blue chips so far this year.

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Source: FULL ARTICLE at DailyFinance

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Microsoft's Leadership Is Still Failing

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By Richard Saintvilus, The Motley Fool

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Microsoft’s

(NASDAQ: MSFT) CEO, Steve Ballmer once said, “The launch of Windows 8 is the beginning of a new era at Microsoft. Investments we’ve made over a number of years are now coming together to create a future of exceptional devices and services, with tremendous opportunity for our customers, developers, and partners.”

All of that sounded great when I first heard it. But many Wall Street analysts never bought into the hoopla. And, as evidenced by the disappointing sales figures for Surface and Windows 8, it seems consumers never really “bought it,” either.

Clearly, Microsoft’s desire to reinvent itself is not going as well as the company had hoped. In fact, I’m not holding my breath to see any drastic changes in the foreseeable future. For that matter, neither is the Street.

Aside from the fact that there’s a gross dislike for the company’s management by analysts, proud supporters of Microsoft have begun to lose patience. Microsoft is still getting punished because it’s not Apple, a company whose hardware focus has led to vast growth in the past decade. Fairly or unfairly, that’s reality. Unfortunately, management has fallen prey to this.

While the company has been trying to be what the Street wants it to be, Microsoft has made the mistake of taking its eye off what it’s truly good at. Microsoft now wants to be a hardware company, and thinks it can take Apple and Samsung head-on.

Unfortunately, the company is making this transition when everyone else has begun to realize that “software is the new hardware.” Even Cisco has begun to shed its hardware dependence, and is now evolving toward software-defined-networking. Just imagine if Microsoft was able to capitalize on its software expertise to get into the networking business.

Microsoft would be able to control the operating systems and the data that travel across network enterprises. While Cisco would still remain dominant, Microsoft would be a legitimate threat. All Microsoft would have to do is pick-off one of Cisco’s chief rivals. F5 Networks or Juniper, which has been trying to sell off some assets and is led by a former Microsoft executive, might be great targets. Microsoft has already had some success in virtulalization, and we see its main rival in the space, VMware, making its own moves into software-defined networking. 

Then again, this is Microsoft’s management we’re talking about here. Ballmer would not dare do something so drastic or game changing. Instead, the company prefers to focus on personal computers, which Microsoft still relies upon for 80% of its business. This is despite the fact that PCs are dying a slow death.

Meanwhile, the cloud market is projected to grow by $177 billion over the next two years. Here, too, Microsoft has appeared too slow to respond to the likes of Oracle and Salesforce.com. Instead, Ballmer has been trying to fight Apple in tablets and phones …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Dow Craters, Then Stages Comeback

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By John Divine, The Motley Fool

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Down nearly 175 points in early trading, the Dow Jones Industrial Average sold off sharply on a disappointing employment report that showed continuing struggles in the job market. With earnings season kicking off next week, the blue chip index rallied later in the day, but still closed 40 points lower, ending with 0.3% losses, at 14,565. The first full week of trading in April saw all three major indexes fall after a red-hot start to the year.

Defying the broader trend, aerospace mainstay Boeing added 1.4% after completing its final test flight of the redesigned 787 Dreamliner battery system. Boeing has been scrambling to deal with systemic issues with its Dreamliner model since earlier this year, when a small fire broke out on a plane at the Boston terminal. The FAA still needs to stamp its approval on the reworked battery system, but today, investors saw at least some forward progress in that area.

Though there weren’t many positive catalysts for the stock today, McDonald‘s managed to end as one of the Dow’s top performers, tacking on 0.8% to close the week. Whether investors were attracted by its 3.1% dividend, or whether Wall Street simply thinks high unemployment makes for more fast food customers, remains to be seen, but the restaurant does have some serious issues to address. Just yesterday, New York City workers staged citywide protests at multiple fast food restaurants, demanding higher wages and the right to organize.

Hit especially hard by today’s labor market woes, credit-card provider American Express slipped 2.1%, to finish as the worst performer in the Dow. Although corporate profits remain at historically high levels, American Express relies heavily on continued consumer spending for growth, and the pressure will be on when the company reports quarterly profits April 17. 

Finally, shares of Cisco Systems ended 2% lower today, though if there’s any solace to be had, it’s from the fact that shares primarily slipped on news of a competitor’s weakness. Cratering nearly 20% lower, shares of F5 Networks stumbled after announcing preliminary figures that (surprise!) weren’t that great. Cisco also agreed to acquire cellular communications company, Ubiquisys, for $310 million, which may have temporarily depressed shares.

Once a high-flying tech darling, Cisco is now on the radar of value-oriented dividend lovers. Get the lowdown on the routing juggernaut in The Motley Fool’s premium report. Click here now to get started.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ …read more

Source: FULL ARTICLE at DailyFinance

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Boeing Soars Over a Falling Dow

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By Travis Hoium, The Motley Fool

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Remember that slow and steady economic recovery we were having? It may have become even slower during March, because the jobs report released this morning was less than inspiring, and the markets are rethinking their recent bullishness. The economy added just 88,000 jobs, according to the Department of Labor. That’s the worst result since June, although unemployment did fall to 7.6% as people left the workforce. The Dow Jones Industrial Average has greeted the news by slumping 0.65% near the end of trading, while the broader S&P 500 dropped 0.79%.

Cisco Systems is one of the biggest losers on the Dow, falling 2.5% today. Competitor F5 Networks said its revenue and earnings would fall well short of guidance the company set back in January. This could mean some market-share gains for Cisco, but F5 CEO John McAdam said, “We believe the slowdown in orders is not caused by competitive losses,” so investors are seeing it as a red flag for the industry as a whole. Cisco won’t release fiscal third-quarter earnings until May 15, so it’s a long wait to see whether Cisco is feeling the same pressure as F5.

ExxonMobil is down 1.2% on a variety of news items. The price of crude oil is down 0.4% today to less than $93 per barrel. The U.S. Department of Energy said crude inventories hit their highest level since 1990, an indication of downward pressure on prices. On the positive side, Exxon’s deal to buy an 80% interest in Liberia’s Block 13 from Canadian Overseas Petroleum got final approval from the Liberian legislature and president. Africa is a growing source of reserves, and this will be an incremental positive for ExxonMobil.

One of the few stocks bucking the downtrend is Boeing , which has risen 1.3% today. This morning, U.S. Transportation Secretary Ray LaHood said the company had a “good plan” to fix a battery problem that have left the 787 Dreamliner grounded. Boeing is planning to run test flights today, so a return to the skies for the entire fleet could come shortly. That’s news investors have been waiting a long time for.

Boeing is a major player in a multitrillion-dollar market in which the opportunities are massive. However, emerging competitors and the company’s execution problems have investors wondering whether Boeing will live up to its shareholder responsibilities. In our premium research report on the company, two of The Motley Fool’s best industrial-sector minds have collaborated to provide investors with the must-know info on Boeing. They’ll be updating the report as key news hits, so don’t miss out — simply click here now to claim your copy today.

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Source: FULL ARTICLE at DailyFinance

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Why Radware Shares Fell 24%

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By Evan Niu, CFA, The Motley Fool

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Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.

What: Shares of Radware have fallen by as much as 24% after the company announced disappointing preliminary earnings for the first quarter.

So what: Revenue is expected to be $45 million, which is well below Radware’s previous guidance of $48.5 million to $49.5 million. Analysts were expecting the company to report $49.2 million. Non-GAAP earnings per share should be approximately $0.30, leaving a lot to be desired compared to guidance of $0.40 to $0.43 per share in adjusted profits. The Street was modeling for $0.43 per share.

Now what: CEO Roy Zisapel said that sales in the U.S. market were strong, but weak performance in the Europe, Middle East, Africa, and China geographical segments dragged down overall results. Needham analyst Alex Henderson told Bloomberg that existing customers are taking longer to order for projects. Networking peer F5 Networks also posted preliminary earnings yesterday that were worse than expected, showing that the broader sector is facing headwinds.

Interested in more info on Radware? Add it to your watchlist by clicking here.

It’s incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out “Who Will Win the War Between the 5 Biggest Tech Stocks?” in The Motley Fool’s latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

The article Why Radware Shares Fell 24% originally appeared on Fool.com.

Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool recommends F5 Networks. The Motley Fool owns shares of F5 Networks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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Cisco Systems Sinks in Sympathy

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By Evan Niu, CFA, The Motley Fool

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Shares of networking giant Cisco Systems are particularly weak today, having lost as much as 5% today and lagging the broader market. The reason for the pessimism is that networking peer F5 Networks announced preliminary figures last night that left a lot to be desired and have negative implications for the broader sector.

F5 expects revenue in the first quarter to be $350.2 million, far below the range of $370 million to $380 million that it had previously forecast. Both GAAP and non-GAAP earnings per share came in below expectations.

CEO John McAdam said the weakness was attributed to revenue shortfalls in the North American market, while sales in Europe, the Middle East, and Asia — collectively known as EMEA — were somewhat disappointing, too. Business in Japan and the Asia-Pacific region were on target. Telecommunications buying was down along with U.S. federal sales, the latter of which is related to sequestration.

On the ensuing conference call, McAdam said a lot of the sales shortfalls were related to timing issues, downplaying fears that the market for its application-delivery controller, or ADC, is maturing. Mizuho Securities analyst Joanna Makris believes F5 is losing some of its pricing power due to intensifying competition.

Rival ADC vendor Radware also issued disappointing preliminary results this morning, with its own revenue projected at $45 million — also below its guidance. Radware said sales were strong in the U.S. market but cited weakness in EMEA and China for its weakness.

These two preliminary releases point to headwinds in the broader networking sector, and Cisco is just one of many networking companies under pressure today as investors digest the gloomy implications for the industry.

Last quarter, product sales were 78% of revenue, and the Americas geographical segment pitched in 59% to the top line. Any slowdown in IT spending, particularly related to the sequestration, will inevitably weigh on Cisco’s results.

Once a highflying tech darling, Cisco is now on the radar of value-oriented dividend lovers. Get the lowdown on the routing juggernaut in The Motley Fool’s premium report. Click here now to get started.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, contentByline: “Evan Niu, CFA“, …read more

Source: FULL ARTICLE at DailyFinance

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What's Wrong With HP Today?

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By Anders Bylund, The Motley Fool

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Hewlett-Packard just took a much-needed step toward a healthier business: Chairman Ray Lane and two other directors stepped down from the board of directors. Lane will remain a director but without the chairman’s leadership duties. Banking veteran G. Kennedy Thompson will leave the board entirely in May, alongside John Hammergren, who is also CEO of health care information company McKesson. Activist investor Ralph Whitworth serves as chairman until further notice. No replacements have been named for the two outright departures.

Investors have been calling for something like this to happen. Each of these three directors earned less than 60% approval ratings in HP‘s recent annual shareholder meeting, while every other director won more than 90% “yea” votes. This is the kind of “vote of no confidence” that drove Michael Eisner out of Walt Disney nearly 10 years ago. When you’re running for office unopposed, you really should expect far higher approval ratings. Lane and company are simply following the will of their shareholders.

Moreover, HP‘s board has long been seen as a liability. Corporate-ethics expert Nell Minow quipped that these people might as well carry a banner saying, “We have no idea what we’re doing.” That was two years and two CEOs ago — not to mention the whole Autonomy debacle. A wholesale housecleaning is very much in order.

And yet HP shares are down 1.6% on the news. It’s the third-worst performer on an already weak Dow Jones Industrial Average today. Financial giant American Express plunged 2.3% on weak payroll data, which will put direct pressure on the company’s top line. Cisco Systems fell 2.2% due to terrible earnings at rival F5 Networks; the entire networking sector is suffering today, and not even mighty Cisco is immune to sectorwide swings.

There are plenty of other losers on the Dow today, but only these two fared worse than HP.

Why, then, is HP plunging on what looks like good news for the long-term health of the company? Well, change is always scary. The action may have underscored HP‘s shaky situation to some investors. Maybe the changes didn’t go far enough; Lane is still on board, and his companions will stay around for another month.

The real reason is probably “all of the above.” That disgraceful shareholder vote set the stage for today’s action, but it still comes as a shock to the system.

Will CEO Meg Whitman pair up with interim chairman Whitworth and really shake HP up? I hope so. This is their chance to catch up with a rapidly changing market. The current strategy sure isn’t working.

The massive wave of mobile computing has done much to unseat the major players in the PC market, including venerable technology names like Hewlett-Packard. However, HP is rapidly shifting its strategy under Whitman’s leadership. Does this make HP one of the least-appreciated turnaround stories on the market, or is this a minor …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Third Time's the Charm: Jobs Data Hurts the Dow

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By Matt Thalman, The Motley Fool

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For the third day in a row, the markets have been hit with poor jobs data.

On Wednesday, payroll-processing company ADP reported that private employers only added 158,000 new jobs in the month of March, whereas economists were expecting 200,000 hires. Yesterday, the Department of Labor’s weekly jobless-claims report indicated that 385,000 initial claims had been filed the previous week, which was 28,000 more than the week before and 35,000 higher than what was expected. And today, the Department of Labor once again poured on the bad news with its March employment report. The Bureau of Labor Statistics reported that just 88,000 new jobs were created last month. Analysts were expecting a much higher number, which most had pinned around 200,000. 

Although the Dow Jones Industrial Average managed to post a strong gain yesterday despite the high jobless claims, as of 12:55 p.m. EDT today it’s down 111 points, or 0.76%. The other major indexes are actually performing worse: The S&P 500 has lost 0.95% of its value, and the NASDAQ is down 1.17%.

Some of the largest drags on the markets today come from the world of technology.

Shares of Cisco have fallen 2.5% after competitor F5 Networks released an earnings warning. Shareholders need to remember that poor performance by the competition can sometimes be good news. However, concerns that established companies are struggling to keep up with ever-changing technology have investors pulling out of the networking giant today. 

After falling 1.3% yesterday, shares of IBM are down a further 1.4% today. While Cisco is getting punished for a competitor’s weakness today, investors may be punishing IBM for its competition’s strength. A recently published independent study indicates that IBM‘s competitor Oracle now has chips and servers that outperform IBM‘s similar devices. 

The Dow’s darling stock of 2013, Hewlett-Packard , is down by 1.9% after chairman Ray Lane announced yesterday that he will step down from his position but still hold a seat on the board of directors. Only 59% of shareholders voted to re-elect Lane at the company’s recent shareholder meeting, so Lane’s move is something of a mixed bag. It likely makes 41% of shareholders happy that he’s no longer the chairman yet unhappy that he’s still on the board. On the other hand, 59% of shareholders voted to keep Lane, so they may be upset today that he gave in to the minority and decided to step down.

The massive wave of mobile computing has done much to unseat the major players in the PC market, including venerable technology names like Hewlett-Packard. However, HP is rapidly shifting its strategy under the leadership of CEO Meg Whitman. But does this make HP one of the least-appreciated turnaround stories on the market, or is this a minor detour on its road to irrelevance? The Motley Fool’s technology analyst details exactly what investors need to know about HP in our new premium research report. Just click here now …read more

Source: FULL ARTICLE at DailyFinance

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Why F5 Networks Shares Got Crushed

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By Brian D. Pacampara, The Motley Fool

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Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.

What: Shares of network gear maker F5 Networks plummeted 19% today after its preliminary quarterly results disappointed Wall Street.

So what: F5 shares have been battered over the past year on concerns over slowing growth, and today’s second-quarter warning only reinforces those worries. While management blamed the downbeat view on weak industry conditions, analysts believe that F5 is losing market share to the likes of Citrix Systems and Radware, giving investors plenty of bad vibes about its competitive position going forward.

Now what: Management now sees second-quarter adjusted EPS of $1.06 or $1.07 on revenue of about $350.2 million, well below its prior view of $1.21-$1.24 and $370 million-$380 million. “Currently, we are looking into all the factors affecting the quarter’s results and we plan to provide more color during our regularly scheduled release and conference call on April 24,” said CEO John McAdam. Given the large amount of industry and competitive uncertainty surrounding F5 at this point, Fools would do well wait for those details before even considering a turnaround bet.

Interested in more info F5? Add it to your watchlist.

It’s incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out “Who Will Win the War Between the 5 Biggest Tech Stocks?” in The Motley Fool’s latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

The article Why F5 Networks Shares Got Crushed originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends F5 Networks. The Motley Fool owns shares of F5 Networks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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The Real Reason the Dow Plunged This Morning

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By Dan Caplinger, The Motley Fool

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Employment has been a sticking point in the U.S. economic recovery for years, and today it showed its uglier side. With this morning’s report from the Bureau of Labor Statistics showing nonfarm payroll growth of just 88,000 jobs — well short of the 200,000 that economists had expected to see — fears that consumers will rein in their spending and hurt businesses’ profits sent the stock market reeling. Moreover, the fact that the unemployment rate actually fell doesn’t necessarily bode well for the employment picture, as it suggests that the troubling trend of disillusioned job-seekers dropping out of the labor force has returned. As of 10:55 a.m. EDT, the Dow Jones Industrials are down 123 points, or 0.84%, while the S&P 500 is down 0.91% after climbing back from more precipitous drops earlier in the session.

As important as employment is, though, you have to look beyond this morning’s report to find the real reason why the Dow fell so much. For more than a year, volatility levels have indicated a complete lack of concern about the mounting problems facing investors around the world. Just a few weeks ago, the S&P Volatility Index , a popular measure of fear levels in the market, dropped to its lowest level since the bull-market days of early 2007. Even with today’s gains of more than 8% having pulled the index up 35% from those lows, investors still haven’t showed much fear in light of a triple-digit drop for the Dow. If new troubles continue building, any return to even normal fear levels could result in a significant correction.

Looking closely at how various Dow stocks are moving this morning supports that conclusion. Cisco is one of the biggest decliners in the Dow: Networking rival F5 Networks‘ earnings warning helped pull Cisco’s stock down nearly 2%. But lately, one area where investors have been fearful is the tech sector as established companies struggle to adapt to changing conditions. That theme seems set to continue, especially if the broader market stops rising.

On the other hand, Caterpillar has performed fairly well, up 0.25%. Ordinarily, the industrial-machinery giant is highly sensitive to economic worries, making it a poor performer on days like this. But even with no news, the fact that Caterpillar is holding up well suggests a continuing lack of concern about troubling global economic trends.

Continue watching fear levels as a key indicator of what’s driving the market. If we see more negative economic data in the near future, a loss of confidence could be what sends stocks to their first major correction in a long time.

Once a high-flying tech darling, Cisco is now on the radar of value-oriented dividend lovers. Get the low down on the routing juggernaut in The Motley Fool’s premium report. Click here now to get started.

…read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Dow Jones May Drop on Jobs Data

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By Roland Head, The Motley Fool

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LONDON — Stock index futures as of 7 a.m. EDT indicate that both the Dow Jones Industrial Average and the S&P 500 may open 0.6% lower. Despite gains for both indexes yesterday, the CNN Fear & Greed Index fell further and closed at 55 last night, signifying “neutral” sentiment.

Stock markets across Europe fell this morning to reach a one-month low ahead of this afternoon’s U.S. nonfarm payroll data. European airline shares fell amid fears that a bird flu outbreak in China that has already killed six people could harm long-haul business, leaving British Airways owner International Consolidated Airlines Group down by 6.8% at 7:30 a.m. EDT. Concerns also grew that North Korea might threaten U.S. bases in the Asia-Pacific region after it moved missile launchers and intermediate-range missiles to its eastern coastline. At 7:30 a.m. EDT, the FTSE 100 was down 1.4%, while Germany’s DAX was 1.8% lower.

Today’s key economic reports are the nonfarm payrolls and unemployment rate for March, both of which are due at 8:30 a.m. EDT, before markets open. U.S. jobs data has disappointed twice already this week, and consensus forecasts are suggesting that 190,000 new jobs were created in March, down from 236,000 in February. Investors will be concerned that these figures may surprise to the downside once more, although the unemployment rate is expected to remain unchanged at 7.7%. Other data due to be published today includes the trade deficit and consumer credit figures for February.

There are no major corporate earnings announcements due today, but companies with strong domestic exposure such as Bank of America could fall if job figures come in below expectations. Stocks that may be actively traded today include F5 Networks, which fell 17% in German trading this morning after cutting its second-quarter sales and earnings forecasts below its previous guidance. Facebook shares rose 3.1% yesterday as the company launched its new Facebook Home app and its customised Android phone, but the social-networking website’s shares are just 0.5% higher in premarket trading, suggesting that investors may wait to see what impact the new app has on Facebook’s mobile revenue before committing themselves to large new positions.

Finally, let’s not forget that the Dow’s daily movements can add up to serious long-term gains. Indeed, Warren Buffett recently wrote, “The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions.” If you, like Buffett, are convinced of the long-term power of the Dow, you should read “5 Stocks To Retire On.” Your long-term wealth could be transformed, even in this uncertain economy. Simply click here now to download this free, no-obligation report.

The article Dow Jones May Drop on Jobs Data originally appeared on Fool.com.


Roland Head has no position in any stocks mentioned. The Motley Fool recommends F5 Networks and Facebook. The Motley Fool …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Can F5 Deliver on High Expectations?

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By Richard Saintvilus, The Motley Fool

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Growth investing can sometimes be a pain in the butt. This is especially true when you find a company that seems expensive, yet the stock will continue to climb as long as that company is posting growth numbers that the Street craves. For quite some time, F5 Networks has fit this description pretty well. But the bar just might have been raised a little too high this time.

While F5 remains a strong play in network traffic management products and services, the company’s no longer on the torrid growth path it once enjoyed. Nevertheless, the stock is holding up pretty well despite the fact that the company is coming off two sub-par earnings reports, including the most recent first quarter when F5 missed on both revenue and earnings-per-share estimates.

Yeah, but so what…
As have been the case for quite some time, there are still plenty of F5 bulls that want to dismiss the company’s recent struggles. On Monday, Deutsche Bank’s Brian Modoff reiterated his buy rating on the stock, while also assigning a price target of $116. Basically, Modoff believes there is 33% upside in these shares. I just don’t see it.

Besides, given that the price-to-earnings ratio is currently trading at more than twice that of Cisco , the share price is already too high. What can F5 do, beyond doubling revenue growth to justify a premium of 33%? For that matter, revenue growth has to return to (at least) 20%. And with increased competition from rivals like Cisco and Fortinet , this is no small task, especially since F5 only managed 13% growth in its recent quarter, which was only a 1% sequential improvement.

By contrast, not only did Fortinet beat on both top and bottom line estimates, but Fortinet grew revenue and net income at a rate of 25% and 26%, respectively. Bulls will argue that F5 grew service revenue 28%. But F5 managed to offset the strong service performance with a dismal 4% growth in product revenue, which also arrived down 2% sequentially.

So, absent some significant fundamental improvement, it’s tough to see how F5 is going to grow in a manner that supports 33% premium in share price. In his research note, Modoff suggested that some “big banks” had shown “meaningful interest” in F5’s Web application security and DDoS mitigation solutions.”

DDoS, which stands for distributed denial of service, is a form of coordinated computer attack. While F5 is certainly strong in this sort of threat prevention, it is no monopoly. Aside from battling Cisco and Fortinet, there are also new entrants like Palo Alto Networks and Sourcefire that are generating plenty of excitement. In other words, not only does F5 have growth to worry about, there is now the threat of margin compression.

Can new acquisitions and products ignite growth?
While F5’s growth has indeed slowed, management has not given up. Over the past couple of weeks, the company has made several new announcements, including a key acquisition in LineRate Systems, …read more
Source: FULL ARTICLE at DailyFinance

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Can New Leadership Unlock Riverbed's Value?

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By Richard Saintvilus, The Motley Fool

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Shares of Riverbed Technology are down 31% so far this year. Not only did disappointing fourth-quarter results immediately send the stock plummeting 22%, investors have now grown concerned about the company’s management — specifically, its ability to effectively synergize the company’s $1 billion deal of OPNET.

While Riverbed has done a decent job making the best out of a tough fiscal environment, the company has not been able to reverse the slowing growth in its wide area network — or WAN — optimization business. However, despite the recent slowdown, the company still boasts a solid 52% market share, surpassing rivals like Cisco . Nevertheless, investors wanted signs that the company was committed to growth, and last week they got it. But will it matter?

Good addition, but in the wrong area
Last Wednesday, the company announced that Robert Whiteley was joining Riverbed as vice president of product solutions marketing. Whiteley arrives after having spent 10 years at Forrester Research as an industry analyst. Riverbed wants to utilize Whiteley’s industry experience since he’s been involved in so many customer meetings.

As I’ve said recently, Riverbed has done a decent job meeting the needs of its customers. Plus, the company has not been doing poorly in terms of overall growth. The problem, however, has been with execution and internal operations. And regardless of what the share price may reflect, Riverbed still posted revenue growth of 17%  year over year and 9% sequentially.

Likewise, product revenue was solid, up 12% year over year, while advancing 9% from Q3. So, this tells me that management is already delivering well to the customer. However, profitability is the problem. All of that growth has not materially impacted the bottom line. Profits tumbled close to 80%. I understand that the deal for OPNET had a lot to do with this. However, there continue to be operational issues that Whiteley will not be able to address.

For instance, operating margin arrived 2% lower at 27% — missing Street estimates. Plus the company only posted 8% growth in operating income. This is despite advancing gross margin by almost 1% year over year. These (among others) are the reasons why the stock is getting hammered. The company has also posted declining EPS while also hemorrhaging cash flow, which recently dropped 12.44%. So while Riverbed deserves credit for identifying an industry talent like Whiteley, the company has failed to addressed the proper areas of its operation.

Last shot at growth?
If you’re still holding shares of Riverbed, you’re still betting that the management can put this company back on track. You’re also wagering that the company will synergize OPNET to the extent that Riverbed can start posting market-beating performances. While it’s certainly impressive that OPNET‘s application management business is growing at a rate of 30%, I just don’t believe that Cisco and F5 Networks are going to make it easy.

F5 has been making moves of its own to solidify its market position by picking off LineRate Systems, …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

F5 Networks Opens New York International Technology Center

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By Business Wirevia The Motley Fool

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F5 Networks Opens New York International Technology Center


Congressman Adam Smith, ranking member of the House Armed Services Committee, and other members of Congress to attend opening and discuss cybersecurity solutions proposed by the President and Congress

NEW YORK–(BUSINESS WIRE)– F5 Networks, Inc. (NASDAQ:FFIV), the global leader in Application Delivery Networking, is proud to announce the March 12 grand opening of its New York International Technology Center (ITC). Located at 600 Lexington Avenue in the heart of Manhattan, this new state-of-the-art application delivery competency center will give engineers, network managers, and technology executives from around the world an opportunity to test networking solutions to ensure their systems are highly resilient and secure.

The announcement of this new ITC comes at a time of high interest in cyber threats for both national defense and in the private sector. During his recent State of the Union address, President Obama noted a new Executive Order on cybersecurity and the advancement of cybersecurity legislation.

“F5 has built its strong brand on the ability to help organizations implement disparate technologies across data centers, networks, applications, and the variety of devices being used,” said Kathleen Ferraro, VP of Product Management and Product Marketing at F5 Networks. “The goal of all our International Technology Centers is to help organizations leverage technology and apply it to the real-world challenges and scenarios they face. For example, we can help a customer architect a single, simplified environment that demonstrates the ways their business is better protected by preventing data leakage and thwarting DDoS strikes, DNS threats, and other attacks.”

The New York ITC grand opening, to be held at 9:00 a.m. ET on Tuesday, March 12, will kick off with a ribbon-cutting ceremony and an overview of the center by F5 CEO John McAdam. Following his address, New York City’s Information Technology and Telecommunications Commissioner Rahul Merchant will speak, followed by Congressman Adam Smith, ranking member of the House Armed Services Committee, and New York Congresswoman Carolyn Maloney. The speakers will address the President’s directive on cybersecurity, among other topics.

“Clearly, technology has become critical to drive businesses and run governments, and it is integral in our personal lives,” said Congressman Adam Smith. “I am proud that F5, a global company headquartered in the Northwest, is taking a leadership role by investing in facilities like …read more
Source: FULL ARTICLE at DailyFinance

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Should Investors Be More Bearish on Juniper?

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By Richard Saintvilus, The Motley Fool

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It wasn’t that long ago that the prevailing debate in the networking sector was, “Which is better: Juniper Networks  or Cisco ?” I continue to do my best to squash these arguments. But the optimism in Juniper remains overdone.

There’s no way this stock should command a price-to-earnings ratio of 57, especially when Cisco wins in every meaningful category such as return on assets, return on equity, operating cash flow, margins — you name it. This story is far different today than what was told at the height of the dot-com bubble. And management is looking for options.

Is the writing on the wall?
There are now reports that Juniper attempted to sell off some of its assets to rivals last year. But it was unable to find a buyer. In a recent Reuters story, it was revealed that Juniper reached out to several competitors (presumably Cisco) to gauge interest in assets such as NetScreen Technologies, a security business that Juniper acquired in 2004.

However, there were no takers. It was determined that the company’s assets lacked innovation and growth — pretty much the same thing that I’ve been saying for years. But management denied the report. Kevin Johnson, Juniper’s CEO was quoted as saying, “If you look at the acquisitions we have done, we’re a buyer not a seller.”

It’s true, the company picked off software start-up Contrail Systems last year and then acquired enterprise security software company Mykonos. But that’s just two acquisitions over the past three years. Meanwhile, Cisco had 11 acquisitions last year alone. Essentially, Cisco is ramping up to regain any market share that it has lost over the years to Juniper and others.

I think Juniper’s management has begun to realize what’s going on. And it’s not by coincidence that NetScreen was the subject of the sale. Juniper’s enterprise security prospects have been diminishing for some time and losing ground to (among others) Check Point Software and F5 Networks. And the company has found no solution to stop the bleeding, which culminated in a grim 2% revenue growth in the most recent quarter — not exactly “tech company” performance.

Bad blood and elbow room
Unfortunately, the security space has begun to get more crowded. The arrival of ground-breaking technologies from Palo Alto Networks have heightened the urgency while also raising some tension. Granted, they are not all competing for the same market. And it may be a stretch to say that Juniper is losing ground to an upstart like Palo Alto, it doesn’t erase the threat of margin pressure that Juniper will likely face in the long term from Check Point and F5.

Conversely, Cisco, which has a much stronger enterprise presence, has been buying its way into higher-margin businesses such as Intucell, while leveraging its existing security offerings with Cognitive. For Juniper, however, while it’s great that the company is now “reviewing” its enterprise focus, I stand by the overall point that the company does not have the technology to rebuild …read more
Source: FULL ARTICLE at DailyFinance

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Adtran's Looking Like a Bargain

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By Richard Saintvilus, The Motley Fool

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“How much worse can things get?” is never a glowing endorsement. But in the case of Adtran , it’s hard to not like the company’s prospects after it lost 34% of its value in 2012. But Adtran was not alone. It was one of several names (including Alcatel-Lucent) that suffered in the poor carrier-spending environment. But these shares look interesting. And with continued improvement in its business and consumer demand, Adtran could be one of the best bargains in the sector.

In-line quarter was as good as a beat
When Oracle picked-off Acme Packet , I started canvassing the sector to figure out who was next. I thought it signaled consolidation. And considering Acme Packet‘s tough time — posting soft revenue due to its heavy reliance on carriers — Adtran was as good a candidate as any. Adtran’s fourth-quarter results weren’t great, either, but were in line with expectations. Revenue dropped 20% year over year and 13.7% sequentially.

As has been the case with larger players like Cisco , Adtran’s enterprise hardware was heavily affected, down 6% year over year. But the company was able to offset the slowdown with growth from dealer channels. And I think this area will be key this year — and as Adtran is assessed in the future. Likewise, the company is making strides with value-added resale channels, which increased 12%, helped by growing demand of the Bluesocket wireless LAN product.

Adtran continues to be underestimated for its technology. While this company is not flashy and doesn’t generate headlines, it does not mean it lacks in innovation or demand. Both broadband access and Internetworking haven’t performed as well lately. But these are good businesses that should see a revival going forward. However, the weak spending environment really took a toll on a sequential basis. Even so, broadband surged 100% year over year. Surprisingly, though, amid tough fiscal concerns overseas, Adtran posted 9% growth in international revenue.

This quarter was far from robust. But it was consistent with what the Street has been seeing from the likes of F5 Networks and the aforementioned Acme Packet. In-line results in this environment are wins, as far as I’m concerned. And it seems investors seem to agree. The stock has been up as much as 14% since the announcement.

Where’s this company going?
I’ve always liked Adtran. But its lack of aggressiveness and conservative approach gets lost in sector that is dominated by big egos. The company’s acquisition of the Broadband Access Business — or BBA— from Nokia Siemens, which completed last year, was a welcome signal that perhaps things are beginning to change. I think this company has a chance to become a leader within a recovering industry.

For Adtran, the good news is that it has three prominent carriers in Verizon, Qwest, and AT&T, which account for close to 55% of the company’s revenue. It also signals an overreliance. Oracle didn’t care much, even though 80% of Acme Packet‘s revenue relies on carriers. But trying …read more
Source: FULL ARTICLE at DailyFinance