By Arathy S Nair
(Reuters) - Network equipment maker F5 Networks Inc (O:FFIV) reported revenue that missed Wall Street's estimates for the first time in eight quarters due to "a marked decrease in the number of deals greater than $1 million".
The company also forecast current-quarter revenue and profit below market estimates, sending its shares down nearly 16 percent to $106 in extended trading.
"(F5's) U.S. business was well below forecast and that's really surprising because the U.S end markets, the enterprise end markets are very robust," Needham & Co analyst Alex Henderson said.
Henderson said F5's results were not a reflection of what rivals such as Juniper Networks Inc (N:JNPR) and Riverbed Technology Inc (O:RVBD) would report for the last quarter of the year.
F5's net income rose 31 percent to $89.1 million in the first quarter ended Dec. 31. Revenue, more than half of which historically comes from the United States, rose 13.8 percent to $462.8 million.
But, revenue fell short of analysts average estimate of $467.2 million, according to Thomson Reuters I/B/E/S.
"I don't think it is a disaster. I think it is definitely something that they can bounce back from," William Blair & Co analyst Jason Ader said.
The core function of F5's products is to distribute Internet traffic evenly across multiple servers in a physical or virtual data center, optimizing performance.
The company has been expanding its suite of security products to better equip its gear to protect applications and networks against malware, phishing and cyber-threats such as the ones that hit the Federal Bureau of Investigation, Royal Bank of Scotland and several major U.S. banks last year.
F5 acquired Defense.Net in May to boost its cloud-based DDoS protection. Such security solutions enhance F5's core network gear products, driving up demand from its customers which range from Facebook Inc (O:FB) to the U.S. government.
F5's Chief Executive John McAdam said on Wednesday that the company's new security offerings were well received by customers and that F5 expects the trend of larger deals for its overall products and services would resume in the current quarter.
But, the company forecast second-quarter adjusted earnings of $1.48-$1.51 per share and revenue of $465-$475 million.
That was short of analysts average estimate of a profit of $1.53 per share on revenue of $478.9 million.
F5 also announced an additional $750 million share buyback program. Even that failed to stem the slide in its shares.