Shares of Akamai Technologies (NASDAQ:AKAM) tanked today, down by 12% as of 11:15 a.m. EST, after the company reported fourth-quarter earnings. The results topped expectations, but Akamai also announced a corporate reorganization.
Revenue in the fourth quarter was $846 million, topping the $829.5 million in sales analysts were expecting. That resulted in adjusted earnings per share of $1.33, also slightly ahead of the consensus estimate of $1.31. The content delivery network (CDN) technology company repurchased $72.5 million worth of stock during the quarter.
"I am very proud of how the Akamai team supported our global customers and billions of internet users who relied on the internet more than ever before during the COVID-19 pandemic," CEO Tom Leighton said in a statement. "As we look forward to 2021, we expect to continue investing in innovation and new products with the goal of accelerating our market leadership in security, edge computing and video streaming."
Akamai is streamlining its organizational structure by creating two new segments, the Security Technology Group and Edge Technology Group. The Security Technology Group will include Akamai's security offerings while the Edge Technology Group will focus on Akamai's core media delivery business. The company expects to record $7 million in restructuring charges in the first quarter.
Guidance calls for revenue in the first quarter of $822 million to $836 million, compared to Wall Street's current expectation of $821 million. Adjusted earnings per share this quarter are forecast at $1.28 to $1.31, while analysts are modeling for $1.29.