F5 and Radware's shares plunge on sluggish sales

ADC vendors warn of slowdown in business in EMEA

Shares in F5 Networks and Radware plunged today after both application delivery controller (ADC) vendors warned of weakening sales.

ADC kingpin F5 Networks' share price crashed by over 20 per cent on NASDAQ this morning after it announced that its first-quarter revenue is set to come in at $350.2m - well below its guidance of $370m-$380m.

It blamed the shortfall on a slowdown in sales in North America, and to a lesser extent EMEA.

Non-GAAP earnings per share are set to come in at between $1.06 to $1.07, well down on F5's guidance of $1.21 to $1.24.

Meanwhile, Radware, which bought Nortel's ADC business Alteon in 2009 for $17.65m, suffered an 18 per cent share slide after its preliminary first-quarter results spooked investors.

It also laid the blame partly on EMEA as it announced that revenues are expected to be $45m, well short of its guidance of $48.5m to $49.5m.

"We had a very weak business in EMEA this quarter," Radware chief executive Roy Zisapel said on a conference call, a transcript of which can be found here.

"We saw quite significant amount of orders in EMEA, and... also in China, that we were not able to close."

Radware expects non-GAAP earnings per share to be $0.30, compared with its guidance of $0.40 to $0.43.

The ADC market will be worth $2bn this year, security vendor Fortinet said last week when it bought ADC outfit Coyote Point Systems, although some analysts have voiced concerns that the market is becoming saturated.