Morning Commentary: Akamai results beat, but weak guidance weighs on convertibles; FireEye firms

By Stephanie N. Rotondo

Seattle, May 3 – More earnings were coming out Wednesday, which was pushing around more issues in the convertible bond market.

Akamai Technologies Inc. reported its first-quarter results late Tuesday, beating expectations on both the top and the bottom lines. But revenue guidance for the current quarter came in lower than expected, which put pressure on the company’s 0% convertible notes due 2019.

A market source saw the issue trading in a 98 to 98.5 context, which was down about a point from the previous day.

The equity (Nasdaq: AKAM) was meantime getting hammered, falling $10.20, or 16.32%, to $52.30.

The lowered revenue guidance resulted in several analysts downgrading their ratings on the stock.

Meanwhile, FireEye Inc. also posted earnings after Tuesday’s close. Like Akamai, the figures beat expectations. Unlike Akamai, better-than-expected guidance helped the 1.625% convertible notes due 2035 add a little.

The notes were seen at 90.875 bid, 91.125 offered.

The underlying stock (Nasdaq: FEYE) was up smartly, rising $1.67, or 13.68%, to $13.88.

In addition to beating on the top and bottom lines, FireEye also said its gross profit margin rose to 73% year over year. That was better than the company’s forecast of about 70%, which was the same level it was at in the first quarter of 2016.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.