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Palo Alto Networks (PANW) on Monday reported second-quarter fiscal year earnings and revenue that beat analysts’ estimates. But Palo Alto’s stock fell, even though the April quarter revenue and billing guidance was slightly below Wall Street targets.
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Amid high expectations, Palo Alto’s profit for the January quarter stood at $ 1.55 per share, up 30% from the prior year period. Revenue rose 25% to $ 1.02 billion, the company said. Billings rose 22% to $ 1.2 billion from estimates of $ 1.18 billion.
Analysts had expected Palo Alto to earn $ 1.43 per share on sales of $ 986 million for the period ended Jan.31. A year earlier, Palo Alto’s earnings were $ 1.19 per share on sales of $ 817 million.
Product revenue rose 3% to $ 254.7 million, while subscription revenue jumped 34% to $ 762.2 million, Palo Alto said.
Shares of Palo Alto fell 4.3% to nearly 368 during extended trading on the stock market today.
Palo Alto’s earnings forecast disappoint
For the current quarter ending in April, Palo Alto expects mid-forecast earnings of $ 1.28 per share, with revenue between $ 1.05 billion and $ 1.06 billion . Analysts had estimated earnings of $ 1.28 per share on revenue of $ 1.05 billion. Palo Alto is forecasting $ 1.23 billion in billing compared to analysts’ estimate of $ 1.22 billion.
The cybersecurity stock entered the earnings report with an entry point of 375.10. A 5% buy zone extends to 393.86.
Palo Alto stock has an IBD Relative Strength rating of just 77 out of 99 possible. PANW action erupted from a double base in October.
Firewall appliances protect computer networks by blocking online intrusions and monitoring web applications
In June 2018, Palo Alto hired a new Managing Director to make strategic changes. The new CEO, Nikesh Arora, was a former senior executive of AlphabetGoogle (GOOGL) and SoftBank Group. Arora has embarked on a frenzy of acquisitions to create a vast cloud-based platform, dubbed “Prisma”.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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