Akamai (NASDAQ:AKAM, news, filings),the 800lb gorilla of content delivery, raised guidance this morning for the fourth quarter and fiscal year. Revenue is now expected to be $230-235M, up quite substantially from the earlier projection of $217-224M. Earnings per share of $0.42-0.43 are likewise expected to exceed the previous range of $0.39-0.41. Mid-quarter increases in guidance have been rare in this recession to say the least, and so this is very welcome news. Does this mean the CDN industry has shifted back into gear?
The CDN segment has seen its share of revenue softness, with Akamai itself seeing a couple declining quarters before seeing the start of a recovery in the third quarter. According to CFO JD Sherman today, "We have been seeing stronger volume growth this quarter as compared to the same quarter last year in our commerce and media verticals, and we anticipate this trend will continue through the end of the year." That would seem to imply a nice, broad recovery is under way.
If Akamai is seeing this burst, one has to wonder if the others in the sector aren't seeing the same thing - good news for Level 3 Communications (NYSE:LVLT, news, filings), Limelight Networks (NASDAQ:LLNW, news, filings) and the rest of the cast perhaps. I haven't seen much to indicate this is a rapid shift in market share, so perhaps it is that the pie is finally getting bigger.
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