{"id":6651,"date":"2022-01-26T01:24:10","date_gmt":"2022-01-26T01:24:10","guid":{"rendered":"https:\/\/mailinvest.blog\/index.php\/2022\/01\/26\/f5-networks-stock-plunges-as-it-warns-of-supply-chain-constraints-through-2022\/"},"modified":"2022-01-26T01:24:10","modified_gmt":"2022-01-26T01:24:10","slug":"f5-networks-stock-plunges-as-it-warns-of-supply-chain-constraints-through-2022","status":"publish","type":"post","link":"https:\/\/mailinvest.blog\/index.php\/2022\/01\/26\/f5-networks-stock-plunges-as-it-warns-of-supply-chain-constraints-through-2022\/","title":{"rendered":"F5 Networks’ stock plunges as it warns of supply chain constraints through 2022"},"content":{"rendered":"

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Network traffic management and security firm F5 Networks Inc.<\/a> delivered strong fiscal first-quarter results today, but its stock fell sharply on a warning about supply chain constraints throughout the rest of the year.<\/p>\n

F5 posted<\/a>\u00a0net income of $179 million, or $2.89 per share, on revenue of $687 million, up 10% from the same period a year ago. The performance was better than expected, with Wall Street predicting earnings of just $2.46 per share on sales of $676 million.<\/p>\n

President and Chief Executive Francois Locoh-Donou (pictured) said customers\u2019 need to grow and evolve applications that support their businesses led to strong demand for its security and delivery products. \u201cDemand for software solutions was particularly strong, with non-GAAP software revenue growing 47% compared to the same period in the prior year,\u201d he added.<\/p>\n

The company sells network security and traffic management tools for large enterprises. In recent times the company has made an aggressive push into software and services, moving beyond its traditional business model that was based on hardware sales. That push has been driven by a wave of acquisitions of companies such as Volterra Inc., which it snapped up<\/a> for a reported $500 million in January, and the cloud security firm Threat Stack Inc., which was acquired<\/a> for $68 million in September.<\/p>\n

F5 said product revenue rose 19% in the first quarter, while its global services revenue inched up 2% from the year-ago period.<\/p>\n

Despite the strong showing in the quarter just gone, investors were clearly more interested in what\u2019s to come. F5\u2019s stock fell almost 15% in after-hours trading after it posted disappointing guidance for the second quarter.<\/p>\n

The company said it\u2019s expecting current-quarter revenue of $610 million to $650 million, some way below Wall Street\u2019s forecast of $692.29 million.<\/p>\n

Locoh-Donou tried to explain the disparity in a conference call with analysts, saying the company\u2019s ability to \u201cmeet customers\u201d continued strong demand for its products will be \u201crestricted\u201d by supply chain constraints that it expects to hamper it for the remainder of the year.<\/p>\n

\u201cDemand drivers across our business are as strong as they have ever been,\u201d the CEO added. \u201cCustomers increasingly see F5 as an innovator uniquely equipped to help them build and scale both their traditional and modern application environments with our software- and systems-based solutions.\u201d<\/p>\n

Photo: Amazon Web Services\/YouTube<\/a><\/h5>\n
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