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.