Acme Packet (APKT) with Small Beat, and Raised Guidance - Adding a Bit

In retrospect my flip of the coin last week would have been better served to land on tails (F5 Networks) rather than heads (Acme Packet) but what can you do.   Since I was restarting a position going into earnings the size was small enough that no real damage would be done if it had imploded, so my upside (in F5) would have been limited in dollar terms, but still would be nice to always be right. ;)  The reaction to earnings for the 2 were immensely different; Acme reported last night and actually has sold off on the news.   Damage is quite limited and the chart still looks fine.  But this is yet another "not cheap" stock at 50x forward 2010 year end EPS.  It is becoming increasingly distressing trying to find any value among the 'go to' stocks.... these are not trailing PEs we are talking about, but a host of companies at 40-60x FORWARD that people keep piling into.

I am going to add a tad (about a 0.6% exposure) here simply because I am struggling to find new places to put in long exposure.

Today has actually been quite wild and woolly day with the stock all the way down to the 20 day MA on the downside, and a new breakout high on the upside... but right now smack dab in the middle. (the high price was the print for about 1 second at the open today)

A quick look at earnings shows 20c v 19c expectation (NON GAAP of course)
Guidance for the year raised from $214-$218M to $220-$221M, and EPS from 72-74 cents to 76-77 cents.

Gross margins 81.4%, similar to that of some of the other 'superstar' stocks in "networking".

(full report here)

Via AP:

• Acme Packet Inc. said Thursday that its third-quarter profit nearly tripled as sales of its communications equipment grew.  The company, whose results came in ahead of analyst estimates, also raised its forecast for the rest of the year. H
• For the quarter that ended Sept. 30, Acme Packet earned $10.5 million, or 15 cents per share, up from $3.6 million, or 6 cents per share, in the year-ago quarter. Excluding one-time items, the company earned 20 cents per share -- a penny higher than what analysts polled by Thomson Reuters expected.
• Revenue jumped 56 percent to $56.6 million, also beating analyst estimates of $55 million.
• Acme Packet said product revenue rose nearly 64 percent to $45.3 million, while maintenance, support and service revenue rose 31 percent to $11.3 million.

Outlook:

• Acme Packet also raised its outlook for the rest of the year. The company now expects a profit of 59 cents or 60 cents per share, or 76 cents or 77 cents excluding one-time items, on $220 million to $221 million in revenue. 
• Previously, the company predicted a profit of 72 cents to 74 cents excluding one-time items, on $214 million to $218 million in revenue.
• Analysts are looking for an adjusted profit of 73 cents per share on $218 million in revenue, on average.

Acme Packet, Inc. is the leader in session border control solutions, enables the delivery of trusted, first-class interactive communications—voice, video and multimedia sessions—and data services across IP network borders.

[Jul 30, 2010: Acme Packet Punishes Investors Post Earnings Report]

Long Acme Packet in fund; no personal position

x