Palo Alto forecasts 2020 profit below estimates, shares down 10%

(Reuters) – Cybersecurity firm Palo Alto Networks forecast fiscal 2020 adjusted profit below Wall Street estimates on Wednesday, sending its shares down 10% in extended trading.

Palo Alto expects full-year adjusted earnings between $5.00 and $5.10 per share, while analysts are expecting $6.25 per share, according to IBES data from Refinitiv.

The company, however, reported better-than-expected fourth-quarter revenue and profit, helped by strong demand in its cloud security business.

Separately, the company said it will acquire Zingbox, an IoT security provider, for $75 million in cash.

The company has doubled down on acquisitions in the last year. Earlier this year, the company bought U.S.-Israeli information security firm Demisto Inc, Israel-based cybersecurity firms Twistlock and PureSec.

Last October, the company acquired U.S-based cloud security company Redlock.

Total revenue rose 22.4% to $805.8 million in the quarter ended July 31. Analysts were expecting $802.4 million, according to IBES data from Refinitiv.

The company reported a quarterly net loss of $20.8 million, or 22 cents per share, compared to a profit of $7 million, or 7 cents per share, a year earlier.

Excluding items, Palo Alto reported a profit $1.47 per share, while analysts’ were expecting a profit of $1.42 a share.

Reporting by Ayanti Bera in Bengaluru; Editing by Shailesh Kuber

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