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Security software company Palo Alto Networks reported better than expected fiscal first quarter earnings after the market close Thursday BUT lowered guidance. PANW will acquire Aporeto, which helps identify and segment workloads across cloud and on-premises networks

Palo Alto Networks

Palo Alto Networks Inc: NYSE: PANW Reported Earnings After Close Monday

$1.05 Beat $1.03 EPS AND $771.9M Beat $768 Million Revenue Forecast 

Earnings

Palo Alto reported earnings that beat analysts' estimates, with first-quarter losses of $142.8 million, or 62 cents a share, on revenue of $771.9 million, up from $656 million a year ago. After adjusting for stock-based compensation and other effects, the company reported earnings of $1.05 a share, down from $1.17 a share a year ago. Analysts had predicted adjusted earnings of $1.03 a share on sales of $768 million, according to FactSet.

Palo Alto Networks Inc: NYSE: PANW

Market Reaction - After hours $230.99 −19.29 (-7.71%)

Highlights

Looking ahead into the second quarter, the company expects billings to grow by 16-17% to the range of $985 million to $1 billion, and revenue to increase by 18-19% to $838-848 million. Adjusted earnings are anticipated to be in the range of $1.11 to $1.13 per share for the second quarter. For fiscal 2020, Palo Alto predicts billings to grow by 18-19% to the range of $4.105-4.165 billion and revenue to rise by 19-20% to the range of $3.44-3.48 billion. Adjusted earnings are anticipated to be in the range of $4.90 to $5.00 per share.

Acqisitions

Palo Alto Networks announced more takeovers.

The company had reported two acquisitions along with earnings in May, after completing five acquisitions in roughly 12 months through the early part of 2019. Alto Networks announced at least its eighth notable acquisition since the beginning of 2018

The security-software company said it would acquire Aporeto, which helps identify and segment workloads across cloud and on-premises networks, for about $150 million in cash, and said that expenses would weigh on second-quarter earnings. The proposed acquisition of Aporeto will further strengthen the company’s Cloud Native Security Platform delivered by Prisma Cloud.

Aporeto identifies workloads and applies micro-segmentation across all infrastructures, helping customers secure their applications at scale. Also, the company expects the proposed acquisition to further extend its leadership in cloud security. The company’s Next-Gen Security offerings performed extremely well in its first quarter, bolstering its confidence in long-term prospects for Prisma and Cortex.

Outlook

Palo Alto Networks predicted adjusted second-quarter earnings of $1.11 to $1.13 a share, "which incorporates net expenses related to the proposed acquisition of Aporeto," the announcement noted. That was well shy of analysts' average forecast of $1.30 a share,

Looking ahead into the second quarter, the company expects billings to grow by 16-17% to the range of $985 million to $1 billion, and revenue to increase by 18-19% to $838-848 million to the range of $4.105-4.165 billion and revenue to rise by 19-20% to the range of $3.44-3.48 billion

Adjusted earnings are anticipated to be in the range of $4.90 to $5.00 per share.

  Source: Palo Alto

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