Categories Earnings, Technology

Palo Alto Networks (PANW) Q2 profit beats estimates but guides Q3 below view

Palo Alto Networks (NYSE: PANW) reported a wider loss in the second quarter of 2020 due to an increase in costs and expenses. The bottom line exceeded analysts’ expectations while the top line missed consensus estimates. Further, the company guided third-quarter revenue and earnings below the street’s view.

Net loss widened to $73.7 million from $2.6 million in the previous year quarter. Adjusted earnings decreased by 21% to $1.19 per share. Revenue jumped by 15% to $816.7 million. The consensus estimates EPS of $1.12 on revenue of $843.26 million for the second quarter.

Earnings Update by AlphaStreet

The overall results showed many signs of positive momentum, notably billings for next-generation security offerings continued to perform very well. The top line was below the company’s forecast as a result of the continued impact of sales incentives related to next-generation security products from the prior fiscal year.

Looking ahead into the third quarter, the company expects billings to grow by 19-22% to the range of $0.98-1.0 billion, and revenue to increase by 15-17% to $835-850 million. Adjusted earnings are anticipated to be $0.96-0.98 per share. Analysts expect EPS of $1.25 on revenue of $873.02 million for the third quarter.

For fiscal 2020, Palo Alto now predicts billings to grow by 17-18% to the range of $4.075-4.125 billion and revenue to rise by 16-17% to the range of $3.35-3.39 billion. Adjusted earnings are anticipated to be in the range of $4.55-4.65 per share. The consensus estimates EPS of $4.96 on revenue of $3.47 billion for fiscal 2020.

The board of directors authorized the company to enter into a $1 billion accelerated share repurchase transaction. The company plans to enter into an ASR transaction with a financial institution during its fiscal third-quarter 2020. This is in addition to its $1 billion share repurchase program that was announced in February 2019. As of January 31, 2020, $801.9 million remained available for future share repurchases under this program.

Read: Is Groupon stock overvalued?

For the second quarter, the top-line growth continues to reflect the increased adoption of its hybrid software-as-a-service (SaaS) revenue model, which consists of products, subscriptions, and support. The company believes this model will enable it to benefit from recurring revenue as it continues to grow installed end-customer base.

The company believes that the growth of its business and short-term and long-term success are dependent on many factors, including its ability to extend technology leadership, growing base of end-customers, expand deployment of platforms and support offerings within existing end-customers, and focus on end-customer satisfaction.

We’re on Apple News! Follow us to receive the latest stock market, earnings, and financial news at your fingertips

Most Popular

Electronic Arts (EA) Q4 earnings drop and miss estimates; revenue down 3%

Video game company Electronic Arts, Inc. (NASDAQ: EA) reported lower earnings and revenues for the fourth quarter of 2021. Earnings also missed analysts' forecast. During the March quarter, net bookings

What lies in store for Tyson Foods (TSN) this year?

Shares of Tyson Foods Inc. (NYSE: TSN) were in green territory during afternoon hours on Tuesday. The stock has gained 32% over the past 12 months and 23% since the

Virgin Galactic (SPCE) fails to impress market amid looming uncertainty

Space tourism company Virgin Galactic Holdings, Inc. (NYSE: SPCE) ended the first quarter of 2021 without generating revenue and continued the losing streak even as uncertainty over its test flight

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top