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Riverbed Technology, Inc. (RVBD) Reports Better Than Expected Second Quarter Results

Riverbed Technology, Inc. (RVBD), a leading provider of wide-area data services (WDS) to companies that utilize wide-area networks (WAN), reported better than expected second quarter results yesterday after the close. Revenues increased 51% year-over-year to $81.6 million vs. analysts’ estimates of $77.0 million. The bottom line swung to a loss of $869,000 vs. last year’s profit of $3.9 million. Excluding items, non-GAAP EPS was 13 cents vs. analysts’ consensus of 11 cents per share.

“We are encouraged by our strong sequential and year-over-year revenue growth, as we posted the highest revenues in company history,” said Jerry M. Kennelly, Riverbed president and chief executive officer. “Wide area data services offers compelling productivity and cost benefits, and the technological advantages of Riverbed’s products are clearly evident in our competitive win rate and industry-leading customer base. During the second quarter, we added a significant number of new customers across a broad range of verticals, bringing our cumulative customer count to over 4,500. New customers included a number of the world’s largest companies, and we now have 44 of the Forbes Global 100, many of which have been won in technical bake-offs against our competition.”

During the conference call to discuss results, Chief financial officer Randy Gottfried announced upside guidance that tops consensus estimates. The company now expects non-GAAP earnings per share of $0.53 to $0.55 for the full year, while analysts expect $0.49 per share. Revenues are now forecasted to be in a range of $329 million to $335 million vs. analysts’ expectations of $321.8 million.

Shares of RVBD closed at $15.58 yesterday and have traded in a range of $10.84 to $52.81 during the past year. The early pre-market bid for RVBD indicates a gap higher on the open of about 15%. The firm of Robert Baird upgraded the shares this morning from Neutral to Overweight and raised its price target to $22 from $15. Shares of Blue Coat Systems, Inc. (BCSI), which is in the same WAN space, at $14.37 are well off their 52-week high of $53.37 and could rise in sympathy to Riverbed’s results. Blue Coat will announce first quarter results in the next few weeks.

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