March 27, 2009 / 4:14 PM / in 9 years

UPDATE 1-Blue Coat Systems shares fall on CFO departure

BANGALORE, March 27 (Reuters) - Shares of Blue Coat Systems Inc BCSI.O fell 10 percent on Friday, a day after the company announced the departure of its chief financial officer.

“The departure comes as a surprise given solid results last quarter and a turnaround effort which appeared to be taking shape,” said Wedbush Morgan Securities analyst Rohit Chopra, who has a “hold” rating on the stock.

A full-time CFO is all the more necessary in this situation, Chopra added.

Last month, the company posted better-than-expected third-quarter earnings and forecast a strong fourth quarter.

A downgrade of rival Riverbed Technology Inc RVBD.O by another brokerage could also be having a “derivative effect” on the stock of Blue Coat, in addition to the CFO departure, Signal Hill Group analyst Erik Suppiger said.

On Friday, Robert W Baird downgraded Riverbed to “neutral” from “outperform,” primarily based on valuation.

Blue Coat competes with Cisco Systems Inc (CSCO.O), Juniper Networks Inc JNPR.O and Riverbed in the Wide Area Network optimization market.

CFO Kevin Royal will be leaving the company to become CFO of Maxwell Technologies Inc (MXWL.O), which provides energy storage and power delivery solutions, Blue Coat said on Thursday.

Chief Executive Brian NeSmith would serve as interim CFO, the company said.

Shares of the company fell to a low of $12.30 but pared some losses and were down $1.23 at $12.47 in late morning trade on Nasdaq. The stock has surged 57 percent so far this year. (Reporting by Mansi Dutta in Bangalore; Editing by Deepak Kannan)

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