Palo Alto Networks Stocks Pressured by Earnings Outlook

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Shares in Palo Alto Networks Inc. fell in the extended session on Monday after the company’s earnings outlook fell short of Wall Street consensus despite high hopes for the cybersecurity industry in 2021. Palo Alto Networks forecast adjusted earnings of $ 1.27 to $ 1.29 per share on revenue of $ 1.05 billion to $ 1.06 billion for the fiscal third quarter, and $ 5.80 to $ 5.90 for revenue share of $ 4.15 billion to $ 4.2 billion for year. Analysts surveyed by FactSet had estimated $ 1.29 for revenue share of $ 1.05 billion for the third quarter, and $ 5.79 for revenue share of $ 4.12 billion for the year.

However, it appears that part of the initial stinger was removed during the company’s conference call, when CEO Nikesh Arora spoke of the opportunity in the wake of a massive attack. Palo Alto Networks PANW stock, -3.16%, which was down nearly 6% after business hours, improved to just 1.5% after the call. The shares closed 3.2% lower in the regular session to end at $ 384.45. “The SolarStorm attack highlighted that companies need a comprehensive and up-to-date map of their entire IT infrastructure environment, including understanding their own networks, as well as external attack surfaces and supply chains,” Arora said at the phone conference. The SolarStorm attack refers to hackers compromising SolarWinds Corp.’s SWI software, + 0.88% Orion IT, which was discovered in December and affected a wide swath of corporate and government users, prompting many organizations to quickly upgrade their networks. Last week, the White House announced that President Joe Biden would address the attack in an upcoming executive action. “We hope that this attack will be a wake-up call for all companies to modernize cybersecurity and serve as a net incremental tailwind, not only for us but also for the industry,” said Arora. The company reported a fiscal loss in the second quarter of $ 142.3 million, or $ 1.48 per share, compared to a loss of $ 73.7 million, or 75 cents a share, in the same period of the year. last year. Adjusted earnings, which exclude charges for share-based compensation and other items, were $ 1.55 per share, compared with $ 1.19 per share in the same period last year. Revenues increased to $ 1,020 million from $ 816.7 million in the prior year quarter. Analysts surveyed by FactSet had forecast earnings of $ 1.43 per share on revenue of $ 985.6 million, based on the company’s estimate of earnings of $ 1.42 to 1.44 per share on revenue of $ 975 million. 990 million dollars. Invoices, which reflect future business under contract, rose to $ 1.21 billion, up from $ 999 million a year earlier, while analysts had forecast a turnover of $ 1.18 billion. The company also maintained its practice of growing through acquisitions. Last week, Palo Alto Networks said it would buy cloud security company Bridgecrew for $ 156 million. Palo Alto Networks shares are up 58% in the past 12 months. In comparison, the ETFMG Prime Cyber ​​Security ETF HACK, -2.33%, is up 35%, the S&P 500 SPX Index, -0.77%, is up 16%, and the Nasdaq Composite COMP COMP Index, from great technology, is up 41%. during that time.