Palo Alto Networks beats estimates but margin concerns send shares lower
Shares of Palo Alto Networks Inc. fell about 2% in late trading today after the cybersecurity company beat Wall Street targets in its fiscal fourth quarter and guided above consensus for the year ahead — though not on margins. The stock had already dropped more than 5% during the regular session.
For the quarter that ended on July 31, Palo Alto reported adjusted earnings of $1.02 per share, up from 95 cents a year earlier, on revenue of $3.41 billion, up 34% year-over-year. Analysts were expecting 98 cents per share on revenue of $3.35 billion.
Subscription and support accounted for $2.67 billion of the total. Product revenue, the smaller and slower line, rose to $738 million from $574 million.
Deals closed earlier in the year pushed the net result into the red. Palo Alto reported a net loss of $282 million, or 35 cents per share, against net income of $254 million, or 36 cents, a year earlier. Amortization of acquired intangible assets, acquisition costs and a $524 million noncash charge on convertible notes that came with the acquisition of CyberArk Software Ltd. accounted for most of the swing, and adjusted net income came in at $853 million, up from $673 million.
