Palo Alto posts loss in 3Q; outlook disappoints
Palo Alto Networks posts 3Q loss on higher costs; outlook weaker than expected, shares fall
SANTA CLARA, Calif. (AP) -- Network security company Palo Alto Networks Inc. on Thursday posted a loss in the fiscal third quarter as expenses grew faster than revenue.
The company's outlook for the current quarter was weaker than expected and shares plunged in after-hours trading.
Palo Alto Networks posted a loss in the February-April period of $7.3 million, or 10 cents per share. That compared with net income in the same quarter a year ago of $796,000, or break-even per share.
Excluding items such as the cost of paying executives with shares, adjusted earnings came to 6 cents per share, above the 5 cents per share expected by analysts polled by FactSet.
Revenue rose 54 percent to $101.3 million. That was short of the $103.4 million analysts had predicted.
Operating expenses rose 70 percent, to $80.1 million, while the company's costs to make its products rose 49 percent to $27.7 million.
On a conference call with investors, the company said it expected adjusted earnings of 6 cents per share on revenue of $106 million to $110 million in the current quarter, which runs through July. Analysts expected more: profit of 7 cents per share on revenue of $114 million.
Shares fell $8.04, or nearly 15 percent, to $46.35 in after-hours trading. The stock closed down 37 cents to $54.39 during the regular session, off 11 percent in the past three months. Palo Alto Networks, which is based in Santa Clara, Calif., went public at $42 last July.
