Fortinet's stock set to bounce back after an upbeat earnings outlook
By Emily Bary
Cybersecurity company's shares are down on the year, but up big in the extended session
After disappointing three months ago with a miss on billings, Fortinet Inc. was set to be back in investors' good graces after the cybersecurity company's latest earnings report brought upbeat results and guidance.
Looking to the third quarter, Fortinet (FTNT) expects $1.445 billion to $1.505 billion in revenue along with $1.530 billion to $1.600 billion in billings, which is metric that combines revenue plus changes in deferred revenue.
Analysts tracked by FactSet were modeling $1.468 billion and $1.589 billion, respectively, from the cybersecurity company on those metrics.
Fortinet also models 56 cents to 58 cents in adjusted earnings per share for the third quarter, while analysts had been expecting 43 cents.
Shares were up more than 16% in Tuesday's extended session. The stock is down about 5% on the year.
See also: After CrowdStrike's 43% stock decline in a month, this analyst now says to buy
That outlook comes as Fortinet posted a record adjusted gross margin of 35.1% in the second quarter. Overall performance in the latest quarter reflected market-share gains in the secure networking business, as well as Fortinet's ability to capitalize on fast market growth in areas like security operations.
The company posted second-quarter revenue of $1.43 billion, up 11% from a year before, while analysts were modeling $1.40 billion. Billings amounted to $1.54 billion, flat relative to a year earlier but ahead of the $1.52 billion that analysts were looking for.
Fortinet posted net income of $379.8 million, or 49 cents a share, up from $266.3 million, or 33 cents a share, in the year-earlier period. On an adjusted basis, Fortinet logged 57 cents in adjusted earnings per share, while the FactSet consensus was for 41 cents.
Opinion: Why CrowdStrike is likely shielded from billions in customer losses caused by its outage
-Emily Bary
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08-06-24 2011ET
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