Akamai Reports Smaller Second-Quarter Loss-Only $42 Million-Are You Kidding Me?

CAMBRIDGE, Mass., Reuters reported that Akamai Technologies Inc.,once a high-flying Internet company, on Wednesday posted a narrower loss of $42.2 million in the second quarter, citing weak corporate technology spending.

The maker of servers and software to speed delivery of Internet data said its loss of 38 cents a share compared with a loss of $92.6 million, or 91 cents per share, a year ago.

The Cambridge, Massachusetts-based company said its revenues fell to $36.3 million from $43.1 million a year ago.

A Nasdaq darling during the Internet bubble, Akamai shares have fallen steadily since closing at nearly $328 on Dec. 31, 1999. Shares of Akamai rose 15 cents, or about 11 percent, to $1.50 on Nasdaq on Wednesday.

The company said its normalized net loss was 29 cents per share, in line with Thomson First Call's consensus forecast of 29 cents per share. Akamai said it calculated its normalized net loss as earnings before interest, taxes, depreciation and amortization minus net interest expense, provision for income taxes and depreciation.

The company said revenues were in line with its expectations.

"The second quarter of 2002 had revenue in line with our expectations and a dramatically improved cash-flow performance," said George Conrades, Akamai's chairman. "We continue to win new, key enterprise accounts, despite the poor environment for corporate IT expenditures."

Faced with vastly slowed tech spending, Akamai has tried to broaden its reach beyond its initial Internet customers and appeal to more traditional, large Fortune 500 clients and government agencies that offer more security and longer sales cycles.

Akamai said new customers in the second quarter included General Motors Co., Plumtree Software and Visteon . Renewed customers include Apple Computer Inc., the U.S. Federal Bureau of Investigation, Victoria's Secret and Xerox Co, it said.

Akamai, which uses thousands of server computers around the world to spot Web congestion and place Web content geographically closer to customers, said it ended the quarter with $160.2 million in cash and marketable securities.

"Of significant importance when reviewing the second quarter is that our quarterly cash burn was only $11.5 million, the lowest level in years," Akamai Chief Financial Officer Timothy Weller said.