Palo Alto Networks (PANW) released second-quarter fiscal earnings and revenues on Monday that exceeded analysts’ estimates. But Palo Alto’s shares fell, despite April quarter revenue and billing guidance exceeding Wall Street targets.
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Amid high expectations, Palo Alto’s earnings for the January quarter reached $ 1.55 per share, an increase of 30% over the same period last year. Revenue grew 25% to $ 1.02 billion, the company said. Revenue increased 22%, to US $ 1.2 billion, against estimates of US $ 1.18 billion.
Analysts had expected Palo Alto’s earnings of $ 1.43 per share on sales of $ 986 million for the period ended January 31. A year earlier, Palo Alto’s profit was $ 1.19 per share on sales of $ 817 million.
Product revenue increased 3% to $ 254.7 million, while subscription revenue jumped 34% to $ 762.2 million, said Palo Alto.
Palo Alto’s shares fell 4.3%, to close to 368 in the extended trading on the stock market today.
Disappointments in Palo Alto earnings guidance
For the current quarter ending in April, Palo Alto expects earnings of $ 1.28 per share at the midpoint of its projection, with revenue in the range of $ 1.05 billion to $ 1.06 billion. Analysts estimated earnings of $ 1.28 per share and revenue of $ 1.05 billion. Palo Alto expects revenues of $ 1.23 billion, against analysts’ estimates of $ 1.22 billion.
The cybersecurity stock entered the earnings report with an entry point of 375.10. A 5% buying zone extends to 393.86.
Palo Alto’s shares have an IBD Relative Strength Rating of just 77 out of 99 possible. PANW shares burst from a double fund in October.
Firewall devices protect computer networks by blocking online intrusions and monitoring web-based applications
In June 2018, Palo Alto brought in a new chief executive to make strategic changes. The new CEO, Nikesh Arora, was a former senior executive at Alphabet(GOOGL) Google and SoftBank Group. Arora embarked on a wave of acquisitions to build a broad cloud-based platform under the “Prisma” brand.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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