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What: Shares of longtime Motley Fool Rule Breakers recommendation Akamai Technologies
So what: First-quarter results beat expectations, but management's Q2 outlook disappointed investors. Q1 revenue grew 15% to $276 million, while normalized net income improved 9% year over year to $0.38 a share over the same period. Executives offered more of the same in the second quarter. By contrast, Wall Street had been calling for modest sequential improvements in both revenue and earnings.
Now what: Mostly, it appears that investors fear that Akamai's growth-stock days have ended. Competitive pressure from Limelight Networks
Maybe they're right, but let's at least be patient enough to hold management to its word. In Q4, CEO Paul Sagan said growth would accelerate in the second half of the year, when the benefits of short-term pricing sacrifices made to secure long-term agreements would begin to appear.
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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. Akamai is a Rule Breakers recommendation. AT&T is a Motley Fool Inside Value pick. You can try any of our Foolish newsletter services free for 30 days.
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