Earnings Trade 7-20-06--FFIV Long We are holding a long position on FFIV shares ahead of earnings due after market close today. We believe that FFIV should be able to beat consensus estimates, which are at: Revenue: $97.28 Million EPS: $0.51 (excluding stock option expenses) and $0.41 (including stock option expense) Given that managment reduced their Q3 outlook below consensus estimates last quarter (management guided revenues $96-98 million and EPS $0.50-0.51 excluding stock option expenses; consensus was at revenue $98.5 million and EPS $0.52) it is likely that current consensus estimates are definiely achievable and likely beatable. FFIV shares have tumbled from the $70 level in April to the $49 level today. We believe that investors have overreacted to various rumors such as excessive competition from Cisco. Additionally, we believe that any downside risk related to the SEC stock option investigation is already priced into shares. Based on past post-earnings moves for FFIV shares, we expect shares to move +/- 10-20%+ and as such, we believe this earnings-related trade is only suitable to traders with a high risk tolerance. This is strictly an earnings trade. As is the case with all of our earnings trades, we plan to close our position in FFIV shares either in the extended hours trading session or in tomorrow's regular trading session at the latest.