(Bloomberg) — Palo Alto Networks Inc. sank after issuing a disappointing earnings outlook for the current quarter, despite rivals including Fortinet Inc. and Check Point Software Technologies Ltd. posting strong results.
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The Santa Clara, California-based cybersecurity company said it expects third-quarter adjusted earnings of 76 cents to 77 cents, far below analysts’ estimates of 80 cents. The network security solutions provider also reported earnings in the second quarter that fell below market expectations.
Palo Alto’s shares declined about 3% in after-markets trading. The stock closed at $201.88 in New York and has gained 11% this year.
The cyber vendor has in recent years been focused on building out an all-in-one security platform, completing 21 acquisitions since 2014 and incorporating more technologies into its enterprise offerings.
The company expects third-quarter revenue to total $2.26 billion to $2.29 billion, the midpoint of which is in line with analysts’ expectations. Revenue for the second quarter gained 14% to $2.26 billion from a year earlier, beating the analyst consensus of $2.24 billion.
The company’s full-year revenue guidance, of $9.14 billion to $9.19 billion, edged analysts’ average estimate of $9.15 billion.
In the fiscal second quarter, which ended Jan. 31, “our strong business performance was fueled by customers adopting technology driven by the imperative of AI, including cloud investment and infrastructure modernization,” said Nikesh Arora, the company’s chief executive officer. “Our growth across regions and demand for our platforms demonstrate our customers’ confidence in our approach.”
Palo Alto Networks also announced that Helle Thorning-Schmidt, former prime minister of Denmark, and Ralph Hamers, former chief executive officer of UBS Group AG and ING Group, would join the board of directors.
(Updates with additional information starting in the sixth paragraph.)
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