Fortinet (FTNT) lowers Q3 revenue outlook

 

Fortinet lowers Q3 revenue outlook to $311-316 mln vs. $322.4 mln Capital IQ Consensus Est, down from $319-324 mln, lowers EPS to $0.15-0.16 vs. $0.18 consensus, from $0.17-0.18; co also authorized a $100 million increase to its existing share repurchase program :

• Based on preliminary financial information, Fortinet expects total billings1 to be in the range of $343-348 mln compared to its previously announced guidance of $372-376 mln
• Co said, "Our third quarter results were primarily impacted by the lengthening of deal cycles as enterprises are becoming more strategic with their purchasing decisions and buying with less urgency than last year. We also encountered sales execution challenges in the North America resulting from the newness of our sales organization, as well as macro issues in Latin America and the U.K. Though we are disappointed with our third quarter performance, we continue to feel good about our competitive-differentiating and market-leading security fabric. We remain confident in the underlying strength of our business and long-term growth opportunity, and committed to delivering returns to our shareholders."
• Shares of FTNT initially tanked 18% to $28/share following this guidance
• Peers including FireEye (FEYE) Palo Alto Networks (PANW), and Checkpoint (CHKP)  were lower in sympathy after hours.

Wed 12 Oct 2016

PFPT -4.3% (in sympathy with FTNT)

PANW -3.5% (in sympathy with FTNT)

CHKP -3.4% (in sympathy with FTNT)

IMPV -2.6% (in sympathy with FTNT)

CYBR -2.5% (in sympathy with FTNT)

CSCO -0.8% (in sympathy with FTNT, through Symantec unit)

** charts before guidance **