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Blue Coat Q1 misses, sees weak Q2; CEO quits

(Reuters) - Internet-monitoring gear maker Blue Coat Systems Inc's quarterly results and sales outlook fell short of analysts' estimates and the departure of its chief executive took the market by surprise, sending its shares tumbling 19 percent in extended trade.

The company, which has been struggling to grow revenue and facing increasing competition from a number of more nimble rivals, forecast second-quarter sales of $103-$110 million, compared with analysts' expectations of $116 million, according to Thomson Reuters I/B/E/S.

Blue Coat is cautious about the mix of big deals in the second quarter given the uncertainly in the federal business, it said on a call with analysts.

Separately, Blue Coat said its Chief Executive Michael Borman left the company less than a year after assuming office.

The company, which counts Websense Inc among its rivals, named Gregory Clark as its new chief executive, effective September 15, and said board member Carol Mills would take on the role in the interim.

For the May-July quarter, the company earned 18 cents a share, excluding special items. Analysts were looking for earnings of 21 cents per share.

Blue Coat, which termed its first-quarter revenue performance as "unacceptable," posted sales of $109.5 million, missing sales estimates of $113.4 million.

The company said its first-quarter product sales were hurt by weakness in its U.S. federal vertical.

Product sales fell by more than a fifth to $58.6 million, with the U.S. federal business making up 4 percent of product revenue.

Blue Coat shares fell 19 percent in extended trading. They closed at $17.68 on Tuesday on Nasdaq.

(Reporting by Saqib Iqbal Ahmed in Bangalore; Editing by Sriraj Kalluvila and Gopakumar Warrier)

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