Wednesday, June 27, 2012

BLOX Rising: Street Sees New Product Offsetting Euro Weakness

Infoblox’s “Trinzic 2210″ is one of several hardware “appliances” the company sells for managing network addresses of devices.

Shares of networking software provider Infoblox (BLOX) are up 30 cents, or 1.6%, at $18.86 after the company last night reported fiscal Q3 revenue and profit that topped analysts’ estimates, and projected this quarter’s revenue slightly ahead of expectations.

For the three months ended in April, the company’s first period reporting since it came public on April 20th, Infoblox turned in $43.4 million, a 37% increase, year over year, and EPS of 5 cents, excluding some costs. That was better than the $41.4 million and 1-penny-per-share estimate of analysts.

For the current quarter, the company projected $42.5 million to $44 million, and profit in a range from breakeven to 1 penny per share, versus the consensus for $42.1 million and breakeven.

Infoblox’s “Trinzic” line of boxes automate the use of “domain name system” (DNS), “dynamic host control protocol” (DHCP), and “Internet Protocol address management” (IPAM). Hence, the company refers to the devices as “DDI.” They are designed to respond more efficiently in changing around network addresses compared to traditional software programs or network routers.

For the Street firms covering the stock who were not in the syndicate along with Morgan Stanley and Goldman Sachs, et. al., the quarter seems to have reinforced their bullish views: six of six analysts covering BLOX have a Buy on the stock.

Pacific Crest‘s Brent Bracelin, for instance, today reiterated an Outperform rating on the stock and a $27 price target, writing that the results,

Increase our confidence in BLOX as a beneficiary of the next wave of spending on smart network infrastructure. As one of the leaders in network automation with more than 50,000 DDI appliances deployed globally, Infoblox is well positioned for solid growth over the next three to five years as enterprise and large operators replace homegrown, manually intensive solutions with dedicated network automation and control appliances. Cloud, mobile and virtualization trends are all adding new layers of complexity, which reinforce the need to automate.

Bracelin notes that new product offerings were 40% of total shipments, higher than the company had expected. Bracelin raised his full-year revenue estimate to $167.3 million from $164.5 million previously, postulating that new products will help offset the market slowdown in Europe, the Middle East, and Africa.

JMP Securities‘s Eric Suppigerreiterates a Market Outperform rating on the shares and a $25 price target. He also sees the company’s new products helping out in an otherwise weak market for networking: “Despite weakness in EMEA, the company achieved upside by growing
44% yoy in North America. We believe the upside reflects new product cycles as well as strong
sales execution with channel partners.”

Suppiger is modeling $167.9 million in revenue this year and raised his EPS estimate to 12 cents from 6 cents.

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