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Nikesh Arora, CEO of Palo Alto Networks and then President and COO of SoftBank Group Corp., right, speaks as billionaire Masayoshi Son, President and CEO of SoftBank Group Corp., looks on as a press conference in Tokyo, Japan on Wednesday, November 4, 2015. SoftBank’s operating profit increased as mobile operator and Internet investment company increased the number of Japanese wireless subscribers , offsetting the losses of its Sprint Corp unit. in the USA
Tomohiro Ohsumi | Bloomberg | Getty Images
Shares of security hardware and software company Palo Alto Networks rose 10% in extended trading on Monday after the company reported better-than-expected earnings and rosy earnings guidance for the new fiscal year.
Here’s how the company did it:
- Earnings: $ 1.60 per share, adjusted, compared to $ 1.44 as expected by analysts, according to Refinitiv.
- Returned: $ 1.22 billion, up from $ 1.17 as expected by analysts, according to Refinitiv.
Revenue was up 28% year-on-year in the quarter, which ended July 31, from 24% in the previous quarter, according to a statement.
“When it comes to the high end of our hardware strategy, we’re starting to see updates,” CEO Nikesh Arora said on a conference call with analysts. “It was a trend that had been subdued. People were holding back … We realize the pandemic has abated as businesses start to return to work.”
The company is raising prices for single-digit hardware products because supply constraints have increased component costs, Arora said.
At the same time, Palo Alto Networks can benefit from cloud adoption across industries, and the company can increase its margins by optimizing its own use of cloud resources, Arora said.
Ransom demands increased in the first half of this year, Arora said. The company has 300 ongoing ransomware readiness engagements, presenting business opportunities, he said.
As for the forecast, for the first fiscal quarter, the company called for $ 1.55 to $ 1.58 in adjusted earnings per share on $ 1.19 billion to $ 1.21 billion in revenue. Analysts polled by Refinitiv expected $ 1.59 in adjusted earnings per share on $ 1.15 billion in revenue.
For fiscal 2022, Palo Alto Networks expects adjusted earnings of $ 7.15 to $ 7.25 per share on revenue of $ 5.28 to $ 5.33 billion. That’s well ahead of Refinitiv’s estimate, which was $ 7.07 in adjusted earnings per share and $ 4.99 billion in revenue.
Excluding after-hours movement, Palo Alto Networks stock had risen around 5% year-to-date, while the S&P 500 index over the same period is up nearly 32%.
This is last minute news. Please check for updates.
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