Palo Alto Networks stock declines on outlook while quarterly results beat Street

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Palo Alto Networks stock declines on outlook while quarterly results beat Street


Palo Alto Networks Inc. shares dropped in the extended session Monday after the cybersecurity company’s quarterly earnings outlook range fell short of the Wall Street consensus while beating estimates for the previous quarter.

Shares of Palo Alto Networks
PANW,
-3.16%

fell 3.3% after hours, following a 3.2% decline in the regular session to close at $384.45.

Palo Alto forecast adjusted earnings of $1.27 to $1.29 a share on revenue of $1.05 billion to $1.06 billion for the third quarter, and $5.80 to $5.90 a share on revenue of $4.15 billion to $4.2 billion for the year. Analysts surveyed by FactSet had estimated $1.29 a share on revenue of $1.05 billion for the third quarter, and $5.79 a share on revenue of $4.12 billion for the year.

Meanwhile, the company reported a fiscal second-quarter loss of $142.3 million, or $1.48 a share, compared with a loss of $73.7 million, or 75 cents a share, in the year-ago period.

Adjusted earnings, which exclude share-based compensation charges and other items, were $1.55 a share, compared with $1.19 a share in the year-ago period. Revenue rose to $1.02 billion from $816.7 million in the year-ago quarter.

Analysts surveyed by FactSet had forecast earnings of $1.43 a share on revenue of $985.6 million, based on the company’s estimate of earnings of $1.42 to $1.44 a share on revenue of $975 million to $990 million.

Billings, which reflect future business under contract, rose to $1.21 billion, up from $999 million a year ago, while analysts had forecast billings $1.18 billion.

“The momentum in the business continues to be strong, with second quarter revenue growth of 25% year over year to over 1 billion USD, driven by strong execution across the board,” said Nikesh Arora, Palo Alto Networks chairman and chief executive, in a statement.

Last week, the company, which is notable for its frequent acquisitions, said it would buy cloud-security company Bridgecrew for $156 million.

Palo Alto Networks shares are up 58% over the past 12 months. In comparison, the ETFMG Prime Cyber Security ETF
HACK,
-2.33%

is up 35%, the S&P 500 index
SPX,
-0.77%

is up 16%, and the tech-heavy Nasdaq Composite Index
COMP,
-2.46%

is up 41%.



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