Riverbed results miss estimates as customers cut spending

(Reuters) - Riverbed Technology Inc reported quarterly results below analysts' estimates due to weak spending by businesses and the U.S. government, sending its shares down 9 percent.

Federal spending has slowed due to automatic cost cuts that came into effect in March after Congress failed to find an alternative plan to reduce expenses, while enterprises have tightened purse strings amid political and economic uncertainty.

Riverbed gets a little more than 10 percent of its revenue from the government.

The weak government spending and soft economy also led rivals Juniper Networks Inc and F5 Networks Inc to give disappointing revenue outlooks for the current quarter.

Riverbed, a market leader in the wide area network (WAN) business with its flagship Steelhead products that can boost data flow speeds by up to 100 times, had been relatively insulated from spending cuts until now.

The company bought Opnet, which makes software to manage traffic on networks, last year to counter the impact of the slowdown in its business. Riverbed's annual revenue growth has fallen to 15 percent from 40 percent over the last three years.

The company's total operating costs more than doubled to $187.9 million in the first quarter ended March 31. Acquisition-related costs were $4.1 million, compared with $556,000 a year earlier.

Net loss was $8.1 million, or 5 cents per share, compared with a profit of $6.9 million, or 4 cents per share.

Excluding items, the company earned 23 cents per share.

Revenue rose 35 percent to $246 million.

Analysts on average had expected adjusted earnings of 24 cents per share on revenue of $261.2 million, according to Thomson Reuters I/B/E/S.

Riverbed shares, which have fallen about 26 percent in the last three months, were at $13.45 in extended trading. They closed at $14.85 on the Nasdaq on Monday.

(Reporting by Chandni Doulatramani and Sayantani Ghosh in Bangalore; Editing by Maju Samuel)

Source: http://news.yahoo.com/riverbed-posts-loss-opnet-acquisition-costs-202248542.html

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