Fortinet (FTNT) reported third-quarter earnings and revenue that topped analyst estimates, but the size of its revenue beat disappointed and its billings guidance missed views. FTNT stock took a dive.
The cybersecurity firm released September quarter earnings after the market close on Wednesday. Fortinet earnings on an adjusted basis were 33 cents per share, up 65% from a year earlier. Revenue climbed 33% to $1.15 billion.
Analysts expected Fortinet earnings of 27 cents a share on sales of $1.12 billion for the period ended Sept 30.
The cybersecurity firm said billings, a sales growth metric, rose 33% to $1.41 billion, in line with estimates.
Fortinet stock plunged 15.3% to 45.07 in morning trading on the stock market today.
FTNT Stock: Lower Billings Guidance
For the current quarter ending in December, the Sunnyvale, Calif.-based company forecasts revenue in a range of $1.275 billion to $1.315 billion. Analysts had projected revenue of $1.27 billion. Fortinet said it expects billings in a range of $1.66 billion to $1.72 billion, missing estimates of $1.74 billion.
“Disappointingly, 202 billings guidance was reduced due to several factors including greater macro uncertainty, especially related to the timing of larger enterprise deals as Fortinet further penetrates this market segment,” said Deutsche Bank analyst Brad Zelnick in a report. “Additionally, we note the company discontinued its detailed backlog disclosure as supply chains normalize, but does now expect to end the year with $400 million in backlog down from $500 million prior, representing another layer of reduced expectations.”
FTNT stock had retreated 20% this year ahead of the earnings report. In the June quarter, the size of Fortinet’s beat also disappointed some investors.
The company competes in the firewall network security market against Palo Alto Networks (PANW), Check Point Software Technologies (CHKP) and others. Firewalls block online intrusions and monitor web-based apps.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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