X

CacheFlow shares cut in half on growth worries

Shares in the maker of computers that speed the distribution of information over the Internet plunge 50 percent after the company posts revenue growth that is less than investors had hoped.

Stephen Shankland Former Principal Writer
Stephen Shankland worked at CNET from 1998 to 2024 and wrote about processors, digital photography, AI, quantum computing, computer science, materials science, supercomputers, drones, browsers, 3D printing, USB, and new computing technology in general. He has a soft spot in his heart for standards groups and I/O interfaces. His first big scoop was about radioactive cat poop.
Expertise Processors, semiconductors, web browsers, quantum computing, supercomputers, AI, 3D printing, drones, computer science, physics, programming, materials science, USB, UWB, Android, digital photography, science. Credentials
  • Shankland covered the tech industry for more than 25 years and was a science writer for five years before that. He has deep expertise in microprocessors, digital photography, computer hardware and software, internet standards, web technology, and more.
See full bio
Stephen Shankland
Shares in CacheFlow, a maker of computers that speed the distribution of information over the Internet, plunged 50 percent Wednesday after the company posted revenue growth that was less than investors had hoped.

CacheFlow beat Wall Street expectations Tuesday by 2 cents, with a loss of 9 cents per share. The company had revenue of $32.5 million for its fiscal second quarter, which ended Oct. 31, a 45 percent increase over the first quarter's $22.4 million and a 573 percent increase over the year-ago quarter's $4.8 million, the Sunnyvale, Calif., company said.

The stock dropped $39 Wednesday to close regular trading at $37.81.

Bear Stearns analyst Robert Fagin said in a research note Wednesday that he was concerned that investor expectations were "too high," with some expecting 65 percent sequential growth. Although Fagin called the quarter good overall and revenue growth "not too shabby," he said he was worried CacheFlow wasn't winning enough new customers and that the company's revenue projections for the next fiscal year may be "too aggressive."

In a conference call Tuesday, chief executive Brian NeSmith had no such inhibitions.

"It was a great quarter," he said. "We continue to believe we're growing faster than the market, capturing market share." Primary competitors are Network Appliance and Inktomi, he said.