Palo Alto Networks Inc. Q2 Earnings Mixed & Posts Weak Outlook For Current Quarter

Palo Alto Networks Inc. (NYSE: PANW) posted mixed fiscal second quarter earnings results and offered a very weak outlook for the current quarter, sending its shares plummeting in aftermarket trading.

Written by StockNews.com

The Santa Clara-based cybersecurity specialist reported Q2 EPS of $0.63, which was $0.01 better than the Wall Street consensus estimate of $0.62.

Revenues jumped 26.3% from last year to $422.6 million, but fell well short of analysts’ view for $429.51 million.

Palo Alto noted that billings for its security services rose 22% year-over-year to $561.6 million, also badly trailing estimates for $586 million.

Looking ahead, PANW forecast Q3 EPS ranging from $0.54 to $0.56, well below the $0.70 per share that Wall Street expects. Its revenue forecast of $406 to $416 million was also very light — analysts are looking for $454.81 million in revenue for the current period.

The company commented on its light revenue results and guidance via press release:

“While fiscal second quarter revenue of $423 million was yet another record for the company, we were disappointed that we came in below top-line expectations due to some execution challenges, which we are moving quickly to address,” said Mark McLaughlin, chief executive officer of Palo Alto Networks. “Our customers rely on us to solve their most difficult cybersecurity challenges, and we have yet again widened the technology gap between our Next-Generation Security Platform and the competition with the largest product and features launch in our history, including expansion of our virtual and cloud capabilities. We are also extending our capabilities in data analytics and machine learning with today’s announcement of our acquisition of LightCyber.”

...Year-to-date, PANW had gained 21.47% prior to today’s report, versus a 5.79% rise in the benchmark S&P 500 index during the same period.

PANW currently has a StockNews.com POWR Rating of B (Buy), and is ranked #6 of 18 stocks in the Software – Security category.