Palo Alto Networks, Inc. (NYSE: PANW) stock fell 20% during Tuesday after-hours trading after the cyber security company reported earnings below estimates. The company reported mixed 2nd Quarter earnings of $0.63 per share on revenue of $422.6 million. While this is a record revenue for the company it is below consensus estimates of revenue of nearly $430 million.
The revenue miss by itself wasn’t what caused the major sellout, Palo Alto also lowered guidance for the third quarter. The company now expects third quarter non-GAAP earnings of $0.54 to $0.56 per share on revenue of $406.0 million to $416.0 million. This is a significantly lower range than the Street's estimate of $0.70 per share on revenue of $452.6 million for the third quarter ending April 30, 2017.
Palo Alto Networks CEO, Mark McLaughlin, commented on the results, "While fiscal second quarter revenue of $423 million was yet another record for the company, we were disappointed that we came in below top-line expectations due to some execution challenges, which we are moving quickly to address. Our customers rely on us to solve their most difficult cybersecurity challenges, and we have yet again widened the technology gap between our Next-Generation Security Platform and the competition with the largest product and features launch in our history, including expansion of our virtual and cloud capabilities. We are also extending our capabilities in data analytics and machine learning with today's announcement of our acquisition of LightCyber."