[ad_1]
Shares of Palo Alto Networks Inc. slid after hours Wednesday after the cybersecurity company trimmed its full-year outlook for billings, despite what it said was an “unprecedented level” of attacks driving demand for greater security.
Palo Alto Networks
PANW,
said it expected total billings of between $10.7 billion and $10.8 billion, compared with a forecast given in August for $10.9 billion to $11 billion. The company considers billings a key metric that factors in subscription and support revenue.
Management held to its forecast for $8.15 billion to $8.20 billion in sales. But it raised its adjusted profit forecast to $5.40 to $5.53 a share.
Palo Alto also said it expected fiscal second-quarter billings in the range of $2.335 billion to $2.385 billion, below FactSet forecasts for $2.41 billion. It forecast second-quarter sales of $1.955 billion to $1.985 billion, with the midpoint in line with forecasts, and adjusted earnings per share of $1.29 to $1.31, above estimates for $1.25.
Shares fell 9.3% after hours on Wednesday.
The company reported the results in the wake of massive cyberattacks on big companies, regulatory efforts to hasten the disclosure of such attacks and attackers’ increased use of AI to steal sensitive data within a matter of hours. Those trends have driven greater demand for cybersecurity.
“An unprecedented level of attacks is fueling strong demand in the cybersecurity market,” Nikesh Arora, Palo Alto Networks’ chief executive, said in a statement Wednesday.
Palo Alto Networks reported net income of $194.2 million, or 56 cents a share, in its fiscal first quarter, compared with net income of $20 million, or 6 cents a share, in the same period a year earlier. Adjusted for one-time items, the company earned $1.38 a share.
Revenue rose 20% year over year to $1.9 billion.
Analysts polled by FactSet expected the company to report adjusted earnings of $1.16 a share on sales of $1.84 billion.
Companies like Clorox Co.
CLX,
and MGM Resorts International
MGM,
have recently suffered breaches that disrupted operations. The Securities and Exchange Commission has voted to adopt new rules requiring publicly traded companies to disclose major cyberattacks within four days of determining whether such an attack will have a material impact on operations.
The SEC last month charged software company SolarWinds Corp.
SWI,
and its chief information-security officer with fraud and failure to sufficiently disclose and address cybersecurity gaps following a major cyberattack in 2020. SolarWinds called the charges “unfounded” and said the allegations “should alarm all public companies and committed cybersecurity professionals across the country.”
Palo Alto Networks’ stock has risen 85.1% this year. By comparison, the S&P 500 index
SPX
is up 17.9% over that period.
[ad_2]
Source link
