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Palo Alto Networks forecasts current quarter earnings below estimates of market shares

(Reuters) – Cybersecurity company Palo Alto Networks Inc forecast current quarter profit below analysts’ estimates on Wednesday, mainly as a result of costs incurred in connection with the recent acquisitions, and a hit of the rates, sending the shares down 5%.

The company forecast adjusted fourth-quarter earnings in the range of $1.41 per share of $1.42 per share, below the analysts’ estimates of $1.54, according to the IBES data of Refinitiv.

The outlook includes approximately $2.5 million, or 2 cents per share, a hit from the rates, the company said.

Palo Alto has doubled down on acquisitions, particularly in the cloud security. The company said on Wednesday it would buy Israel-based cybersecurity companies twist-lock for $410 million in cash and PureSec for an undisclosed amount.

The company in March completed the acquisition of the AMERICAN-Israeli information security company Demisto Inc.

Palo Alto weather forecast current quarter revenue of $795 million to $805 million, while analysts had expected $797.4 million.

The disappointing forecast overshadowed third-quarter sales and profit beat.

Palo Alto-the services of the revenue, including the revenue of a contract on the basis of subscriptions for the security of supply, increased by 28% to $448.2 million in the quarter.

The net loss narrowed to $20.2 million, or 21 cents per share, in the three months ended April 30, of $ 40.4 million, or 44 cents per share, a year earlier.

Excluding items, the company earned $1.31 per share, beating the average analyst estimate of $1.25.

The total turnover increased 28% to $726.6 million. Analysts on average had expected revenue of $704 million.

Reporting by Akanksha Rana in Bengaluru; Editing by Sriraj Kalluvila

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