Akamai 3Q beats Street; President Kenny resigns
Online content delivery company Akamai Technologies Inc. said Wednesday that its third-quarter net income rose 6 percent as revenue grew on rising demand for streaming to multiple connected devices. The results beat expectations, and the company's shares rose.
Akamai shares jumped $3, or 12.6 percent, to $26.78 in after-hours trading Wednesday after closing up 48 cents, or 2.1 percent, at $23.78 in the regular session.
The company also said that David Kenny had resigned as president and director of the company. Kenny joined the company as president in September 2010 after serving on the board for three years.
CEO Paul Sagan was re-appointed as president.
Kenny's departure is likely to fuel the intrigue swirling around Yahoo Inc. as its board evaluates whether to pursue a breakup of the company or hire a permanent CEO to replace Carol Bartz, who was fired seven weeks ago. Kenny has been touted by analysts and investors as a potential CEO candidate at Yahoo since he joined the company's board in April.
In a statement, Kenny said he is leaving Akamai because he wants "to return to my first passion of pursuing emerging opportunities on the consumer Internet."
For now, Yahoo is being run on an interim basis by Tim Morse, its chief financial officer.
Akamai also named Kumud Kalia chief information officer, responsible for leading global strategy, development and operations of the applications and infrastructure that supports Akamai's business processes. Kalia will report to Sagan.
Kalia, an engineer, most recently ran the information services organization for Direct Energy, and was previously chief information officer of the business markets group of Qwest Communications International.
Net income in the three months to Sept. 30 grew to $42.3 million, or 23 cents per share, from $39.7 million, or 21 cents per share, a year ago.
Adjusted to exclude stock-based compensation costs and the amortization of intangibles, adjusted earnings came to 34 cents per share, a penny better than expected by analysts polled by FactSet.
Revenue grew 11 percent to $281.9 million from $253.6 million. Analysts were looking for revenue of $279.2 million.