F5 Networks Names Insider to Be CEO; Profit Rises 23%

   By Tess Stynes 
 

F5 Networks Inc. (FFIV) named company insider Manny Rivelo as its new president and chief executive starting in July, succeeding current CEO John McAdam, who is retiring from the roles.

The company also reported that its earnings rose 23%, led by improved sales to customers in the U.S. during the quarter ended in March.

However, shares fell 3.3% to $116.40 in recent after-hours trading as the company's outlook for the current quarter was mostly below expectations.

The company said Mr. Rivelo joined F5 in October 2011 and has been responsible for the company's strategic development, product management and global marketing strategy, expanding F5 beyond its data center roots. His previous experience include senior management roles at Cisco Systems Inc. (CSCO).

Mr. McAdam will become chairman of the company, also starting in July. Current Chairman Al Higginson will remain on the board as lead independent director.

For the quarter ending June 30, the company forecast per-share earnings of $1.57 to $1.60 and revenue of $475 million to $485 million. Analysts polled by Thomson Reuters expected per-share profit of $1.59 and revenue of $489 million.

F5 and other networking companies have had to contend with growing competition from cloud-computing providers. To deal with revenue pressure, F5 has broadened its offerings with a slate of new products and started a tiered pricing program. The company also has benefited for strong demand for security products.

Mr. McAdam said Wednesday that revenue in the latest quarter reflected growth in sales to U.S. service providers and enterprise customers.

"The region's strong performance was underpinned by a rebound in both the number and total dollar amount of deals greater than $1 million," he stated. In contrast, sales growth in EMEA and APAC were below expectations, he added.

For the period ended March 31, F5 Networks reported a profit of $85.7 million, or $1.18 a share, up from $69.6 million, or 91 cents a share, a year earlier. Excluding stock-based compensation and other items, per-share earnings rose to $1.59 from $1.27. Revenue increased 12% to $472.1 million.

F5 Networks had forecast per-share earnings of $1.48 to $1.51 and revenue of $465 million to $475 million.

Write to Tess Stynes at [e-mail]

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