Palo Alto Networks’ first-quarter results topped Wall Street views, but shares dropped 5.6% in premarket trading Thursday after the cybersecurity company’s full-year guidance failed to wow investors.
The Santa Clara, Calif.-based company raised its full-year revenue outlook to between $9.12 billion and $9.17 billion, bracketing the $9.13 billion analysts on FactSet expect.
Palo Alto’s full-year guidance was expected to be a key focus as it released results, according to Wedbush analysts, who said investors are eying its pipeline of deals with customers looking to consolidate their cybersecurity vendors.
Palo Alto posted a first-quarter profit of $350.7 million, or 99 cents a share, compared with $194.2 million, or 56 cents a share, for the same period a year earlier.
Stripping out one-time items, the company’s fiscal first-quarter earnings per share came in at $1.56. Analysts polled by FactSet had forecast adjusted earnings of $1.48.
First-quarter revenue rose 14% to $2.14 billion, beating the $2.12 billion expected by analysts. Subscription and support revenue rose to $1.79 billion from $1.54 billion.
For the second quarter, the company said it expects revenue to grow up to 14% to $2.22 billion to $2.25 billion, and adjusted earnings to be in the range of $1.54 to $1.56 per share.
Additionally, Palo Alto Networks said its board of directors approved a 2-for-1 stock split, which will also double the number of authorized shares of common stock to 2 billion.
Trading is expected to begin on a split-adjusted basis on Dec. 16, Palo Alto said.
