RW Baird & Co.’s Jayson Noland this morning reiterates an Outperform rating on shares of networking equipment maker Riverbed Technology (RVBD) despite cutting his Q4 estimates based on some “mixed” signals for the company’s business.
Noland, who had previously cut his Q3 estimates, now sees Riverbed turning in Q4 revenue and EPS of $189 million and 21 cents a share versus a prior $195 million and 22 cents a share. That is below the $199.94 million in revenue and 23 cents per share the Street has been modeling.
He notes that his “checks” of the distribution channel show that Riverbed “held the quarter open longer than normal,” which means that the company had a “lower pipeline” of deals heading into Q4, he thinks.
He also thinks Riverbed refused to compromise on prices of its equipment despite aggressive pricing by competitor Cisco Systems (CSCO).
On the brighter side, Riverbed’s “Whitewater” product, an appliance developed for “cloud” computing, is starting to generate positive buzz in the U.S. and Europe, he writes. “We expect to see revenue traction in calendar 2012 and see the Whitewater total addressable market as meaningful in the medium to long term.”
Riverbed is expected to report Q3 results on October 19th.
Riverbed shares today are down 8 cents, or 0.4%, at $21.16.
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