Palo Alto Networks Stock Hit As It Sees Q3 Results Below Market, Cuts FY24 Revenue Outlook

(RTTNews) - Palo Alto Networks' (PANW) shares declined more than 21 percent in the after-hours trading on Nasdaq on Tuesday, and is down around 23 percent in pre-market activity on Wednesday after the cybersecurity company issued third-quarter outlook below market, and trimmed its revenue view for fiscal 2024.

However, the company reported a significantly higher earnings in its second quarter, and adjusted earnings and revenues beat Street estimates. The company also raised fiscal 2024 earnings view.

For the second quarter, net income was $1.7 billion or $4.89 per share, compared to prior year's $0.1 billion or $0.25 per share. The latest results included a $1.5 billion net tax benefit from a release of the company's valuation allowance.

Adjusted net income was $0.5 billion or $1.46 per share, compared to $0.3 billion or $1.05 per share a year ago.

Total revenue for the quarter grew 19 percent to $2.0 billion from $1.7 billion in 2023.

Analysts on average expected the company to report earnings of $1.3 per share on revenues of $1.97 billion, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

Looking ahead for the third quarter, the company projects adjusted net income per share in the range of $1.24 to $1.26, and total revenue in the range of $1.95 billion to $1.98 billion, representing year-over-year growth of between 13 percent and 15 percent.

Analysts expect earnings of $1.29 per share on revenues of $2.04 billion for the quarter.

Total billings would be in the range of $2.30 billion to $2.35 billion, a growth of between 2 percent and 4 percent.

For the fiscal year 2024, the company updated the guidance and now expects adjusted net income per share in the range of $5.45 to $5.55 and total revenue of $7.95 billion to $8.00 billion, a growth of between 15 percent and 16 percent.

Analysts expect earnings of $5.51 per share on revenues of $8.19 billion for the year.

The company previously expected adjusted net income per share in the range of $5.40 to $5.53, and revenue in the range of $8.15 billion to $8.20 billion, a growth of between 18 percent and 19 percent.

Total billings would be in the range of $10.10 billion to $10.20 billion, a growth of between 10 percent and 11 percent.

The company previously expected total billings of $10.70 billion to $10.80 billion, representing year-over-year growth of between 16 percent and 17 percent.

In the extended trading on Tuesday, Palo Alto shares traded at $288.89, down 21.09 percent. In pre-market activity at present, the shares are at $281, down 23.24 percent.

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