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Akamai beats expectations despite industry downturn

The once high-flying content-delivery company soars past Wall Street expectations in its fourth-quarter earnings report, though profitability is still elusive.

Akamai Technologies, the once high-flying content-delivery company, soared past Wall Street expectations in its fourth-quarter earnings report Wednesday.

But the company still posted a substantial loss, with no sign of profitability immediately in sight. The company reported a loss of 61 cents per share on revenue of $37.2 million, compared with expectations that it would lose 68 cents a share.

The strong results provide some sign that demand for Internet-speeding infrastructure services remains strong despite the downturn across the Net market. The young company is facing substantial competition in the content-delivery business but said it was able to sign up hundreds of new customers last quarter.

"Challenges do persist for all of us," Timothy Weller, Akamai's chief financial officer, said on an earnings conference call. "But we have now demonstrated a solid customer base and strong revenue growth."

The company retained revenue guidance of $240 million to $250 million for 2001, up from total 2000 revenue of $89.8 million. But it said it would lose considerably less money than it had predicted last quarter, saying it would lose between $140 million and $145 million instead of $150 million to $170 million.

This would be in part because it is reducing its capital expenditure forecast, citing lower costs for bandwidth and network servers, along with increased productivity. The company will spend between $100 million and $120 million instead of $160 million.

As a result, the company will reach the break-even point sometime in the second quarter of 2002 and will see its first profits in the third quarter of that year, executives said.