Palo Alto Networks shares jump after strong outlook that CEO calls ‘prudent’

Palo Alto Networks shares jump after strong outlook that CEO calls ‘prudent’

The shares of Palo Alto Networks Inc. rose in Monday’s extended session after the cybersecurity firm not only said its forecast, which beat Wall Street estimates, was “prudent” given macroeconomic uncertainty, but also announced a stock split.

Palo Alto Networks PANW,
-1.06%
The stock was up more than 8% after hours after a 1.1% drop in the regular session to close at $508.05. The company said its board declared a three-for-one stock split to take effect on Sept. 14.

The company said it expects adjusted earnings of $2.03 to $2.06 per share on revenue of $1.54 billion to $1.56 billion and revenue of $1.68 billion to $1. .7 billion for the first fiscal quarter, and $9.40 to $9.50 per share on revenue of $6.85 billion to $6.9 billion and revenue of $8.95 billion to US $9.05 billion in the year.

Analysts polled by FactSet forecast $2.03 per share on revenue of $1.54 billion and revenue of $1.69 billion for the first quarter, and $9.27 per share on revenue of $6. 74 billion and revenues of US$ 8.58 billion for the year.

And that’s prudently taking into account possible macroeconomic headwinds, Nikesh Arora, president and chief executive of Palo Alto Networks, told analysts on the conference call.

“We have companies that are lowering guidance, companies that are lowering EPS guidance, companies that are warning that the lifecycles of business with potential customers are shorter, so we were trying to make sure we were prepared for the upside and downside,” Arora said. to analysts. “I think it’s fair to be prudent in this market.”

The company has been piling up beat and raise quarters lately. In May, the company raised its annual outlook for the third consecutive quarter to an annual adjusted earnings outlook of $7.43 to $7.46 per share, revenue of $5.48 billion to $5. 5 billion and revenues of US$ 7.11 billion to US$ 7.14 billion. The company reported adjusted earnings of $7.56 per share, revenue of $5.5 billion and revenue of $7.47 billion.

For the fourth fiscal quarter, Palo Alto Networks reported net income of $3.3 million, or 3 cents per share, versus a loss of $119.3 million, or $1.23 per share, in the same period. from the previous year. Adjusted earnings, which exclude share-based compensation charges and other items, were $2.39 per share, compared to $1.60 per share in the same period last year.

The security software company’s revenue rose to $1.55 billion from $1.22 billion in the same quarter last year. Revenue, which reflects future business under contract, increased 44% to $2.7 billion from a year ago.

Analysts had forecast earnings of $2.28 per share, revenue of $1.54 billion and revenue of $2.33 billion, based on Palo Alto Networks’ forecast of $2.26 to $2.29 per share, revenue of $1.53 billion to $1.55 billion and earnings of $2.32 billion to $2.35 billion.

Palo Alto Networks shares are down 9% for the year. In comparison, the ETFMG Prime Cyber ​​Security ETF HACK,
-1.90%
fell 20%, the S&P 500 SPX index,
-2.14%
down 13%, and the high-tech Nasdaq Composite Index COMP
-2.55%
if it’s 20%.

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