Palo Alto’s Revenue Growth Disappoints (PANW)
Palo Alto Networks Inc. (NYSE: PANW), which specializes in firewalls products, announced better-than-expected fiscal first quarter results following closing bell on Thursday, thanks to 50 percent jump in revenue as demand for network based security products continued to rise during the period; nevertheless, shares traded mainly flat on Friday as analysts were expecting stronger revenue growth.
On Friday the Stock inched up 0.02 percent for the day, having earlier plunged as low as 4 percent by midday trading.
Palo Alto, which went public last July, said that revenue for the quarter ended October 31 was $85.9 million, beating analysts’ consensual estimate for revenue of $83.7 million.
Net income for the period stood at $2.6 million or 4 cents a share. Analysts, on average, were expecting earnings of 3 cents a share.
Commenting over the results, technology analyst Dan Ives of FBR Capital Markets said that Palo Alto showed strong results in a very tough macroeconomic environment.
“At the end of the day, it was a good quarter relative to a tough macro environment.”
“Even though they beat expectations, growth was slower due to increased competition. Investors may be a little spoiled due to growth in the past,” added Ives.
However Ives was optimistic on Palo Alto as he wrote, “We believe Palo Alto continues to gain share in the overall network security market from larger incumbents like Cisco (NASDAQ: CSCO) and Juniper (NYSE: JNPR) as the threat environment grows and more complex solutions are required.”
In the earlier quarter, Palo Alto had reported revenue growth of 88 percent while in fiscal year 2011-2012, revenue grew by 115 percent to $ 225.1 million.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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