Data Center Related Stocks: Q2 Earnings Performance

by: Paolo Gorgo

When the timing (date) of a company's earnings report becomes even more important than the quality of data reported, it may seem a bit useless to discuss post earnings performances. But in spite of the recent market volatility, a quick look at how data center related companies behaved after earnings may be interesting for investors who want to analyze a few trends in the sector.

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It will not take much time to talk about positive earnings performances, as Equinix (NASDAQ:EQIX) was the only stock that enjoyed a strong rebound (almost +9%), after delivering solid numbers for Q2. The company also reported the week before Mr. Market took the roller-coaster, and its shares have since declined.

On the negative side, it's deep red for CDNs: Both Akamai (NASDAQ:AKAM) and Limelight Networks (NASDAQ:LLNW) lost ground after delivering weaker numbers than expected and disappointing investors with their guidance. Both companies have lost more than 50% since the start of the year.

Most other earnings performances seem relatively flat, especially if you consider the surrounding environment, with two notable exceptions, TeleCity Group and Dupont Fabros (NYSE:DFT).

While the negative performance of TeleCity was probably mainly due to market conditions (as the company delivered good numbers and also announced an acquisition in Ireland), Dupont Fabros fell after earnings as a result of announcing that Yahoo (NASDAQ:YHOO), one of its key customers, was not renewing one of its leases with the company.

Interxion (NYSE:INXN) will be the last company in the sector to report Q2 earnings, next Wednesday, August 17, and its management is probably keeping fingers crossed, hoping volatility decreases and the company's numbers can be valued for what they are, and not because of market momentum.

Disclosure: I am long EQIX.