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Akamai Technologies ‘ ( AKAM ) revenue from media and entertainment customers such as Apple ( AAPL ) and Facebook ( FB ) is expected to fall in Q1, but analysts expect a boost from the Internet infrastructure company’s move into security services. Cambridge, Mass.-based Akamai, the biggest provider of content delivery network services, is set to report Q1 earnings after the close Tuesday. Akamai’s global CDN helps Apple, Facebook and other speed up video streaming, e-commerce transactions and business software downloads over the Internet. Apple, though, is among the big tech companies that has been developing its own CDN, while also using other CDN providers. Mark Mahaney, analyst at RBC Capital , is modelling a 3.5% year-over-year decline in sales for Akamai’s media and entertainment business but a 15% rise in cloud-security revenue. “We are looking for $207 million, or a 3.5% (media segment) decline, as two of the company’s largest media customers (likely Apple, Facebook) transition off the Akamai platform. The concern over whether additional top media customers will migrate off Akamai remains the most material overhang on the stock,” Mahaney said in a research report. “Security is becoming an increasingly meaningful part of the financial story, accounting for 12% of revenue in 2015. We are modeling 45% year-over-year growth to $79.8 million.” Akamai competes with Level 3 Communications ( LVLT ), and Limelight Networks ( LLNW ) as well as startups Fastly and CloudFlare. Verizon Communications ( VZ ) ( IBD ), Amazon.com ‘s ( AMZN ) Amazon Web Services, IBM ( IBM ) and Comcast ( CMCSA ) also are emerging as new rivals in some parts of the CDN market. Analysts polled by Thomson Reuters estimate Q1 EPS of $564 million, up 7% from the year-earlier period. Analysts estimate earnings per share minus items of 63 cents, up 3%. Akamai stock is about even in 2016 but down 32% over the past 12 months. Akamai has a low IBD Composite Rating of 50 out of a possible 99. Akamai stock was down a fraction, near 51, in early trading in the stock market today . Scalper1 News
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