(Updates with share price in the second paragraph.)
Feb. 7 (Bloomberg) -- Akamai Technologies Inc., a company that helps customers speed the delivery of online content, tumbled the most in a year and a half after its quarterly revenue and forecast missed estimates.
Akamai shares fell as much as 19 percent to $33.55 in New York, the biggest intraday decline since July 2011. The stock had been up 1.6 percent this year through yesterday.
Fourth-quarter sales climbed 17 percent to $378 million, the Cambridge, Massachusetts-based company said yesterday in a statement. That trailed the $381.4 million predicted by analysts on average, according to data compiled by Bloomberg. For the first quarter, the company forecast revenue of $352 million to $362 million, short of the $369.8 million estimate.
The results showed signs of softening demand for Akamai’s services, which help customers such as news sites and Web retailers speed up their online offerings, said Chad Bartley, an analyst at Portland, Oregon-based Pacific Crest Securities.
“Revenue was definitely lighter than expectations,” he said. “Growth decelerated quite a bit in the fourth quarter.”
The results marked the first quarterly earnings report for Tom Leighton, a company co-founder who took the chief executive officer job on Jan. 1. He was named to the post in December after an eight-month search.
Even with the sales shortfall, earnings topped analysts’ projections last quarter. Akamai posted an adjusted profit of 54 cents a share, compared with an average estimate of 50 cents. Still, the company said margins will remain in the low 40 percent range for the next few quarters. At a time when margins are improving for competitors, that was disappointing, Gray Powell, an analyst at Wells Fargo & Co. in New York, said in a note to investors.
“Due to the soft Q1 revenue guidance and margin pressure near term, we think Akamai shares will be in the penalty box with investors over the next few months,” said Powell, who has the equivalent of a buy rating on the stock.
--Editors: Nick Turner, Jillian Ward