Riverbed Technology (RVBD) Trims Q3 Outlook

Riverbed Technology (NASDAQ: RVBD) announced preliminary financial results for the third quarter fiscal year 2014 (Q3’14).

Non-GAAP revenue for Q3’14 is expected to be in the range of $276 million to $277 million, compared to the company’s previous guidance of $285 million to $291 million. The revised guidance primarily reflects lower than expected growth in the company’s WAN Optimization and virtual ADC businesses. The company narrowed its Q3’14 non-GAAP earnings guidance to a range of $0.30 to $0.31 per diluted share, compared with the company’s prior guidance range of $0.30 to $0.32 per diluted share.

*** The Street sees Q3 revs of $286.8 million and EPS of $0.31.

The company also announced that it has initiated a restructuring plan in order to reduce annual costs by $20 million to $25 million and improve annual operating margins by 1% to 2%. The company expects these restructuring efforts to be substantially complete by the end of calendar 2014.

“In light of current business conditions, we are taking decisive steps to improve our cost structure in order to drive enhanced operating performance,” said Jerry M. Kennelly, chairman and CEO, Riverbed. “We believe these actions enable us to deliver increased value to our shareholders while continuing to deliver the products and support expected by our customers.”

In addition to these restructuring initiatives, Riverbed's Board of Directors has determined to undertake a comprehensive review, with the assistance of its advisors, of strategic and financial alternatives to enhance shareholder value. There is no set timetable for the review process. The company does not intend to disclose or comment on further developments unless and until its Board approves a specific action or it otherwise concludes its review of alternatives.

Riverbed will host a conference call to report third quarter results October 23, 2014, at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time); the company will provide further details on the financial results and restructuring plans at that time. The call will be broadcast live over the Internet at http://www.riverbed.com/investors, and a replay of the webcast will be available for 12 months.

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