Fortinet Tumbles Most in a Year on Tempered Outlook
Fortinet Inc. (FTNT), a provider of computer-network security, fell the most in more than a year after narrowing its annual forecast and predicting fourth- quarter results that trailed analysts’ estimates.
The shares tumbled 19 percent to $20.14 at the close in New York, for the biggest drop since July 2011. The stock has declined 7.7 percent this year.
Fortinet, whose Chief Financial Officer Ken Goldman is slated to take the same role at Yahoo! Inc. (YHOO) on Oct. 22, yesterday forecast fourth-quarter earnings and sales that trailed analysts’ estimates after citing weaker results from China in the third quarter. The Sunnyvale, California-based company reported billings for last quarter that declined from the prior period.
“We were expecting stronger performance from China,” Goldman said on an analyst call. “The volatility we often face in that market was accentuated by a reliance on large deals.”
The company has taken steps to “enhance our channel and management of sales teams and expect performance there to improve over time,” Goldman said.
Fourth-quarter earnings will be about 15 cents per share, the company said on the call. That trailed an average estimate of 16 cents, according to data compiled by Bloomberg. Revenue for the period will be $142 million to $146 million. Analysts had projected $146.3 million.
Full-year sales will be $524 million to $528 million, the company said on the call. Fortinet had previously projected sales of $525 million to $530 million.
Billings for the third quarter were $145 million, from $145.8 million in the second quarter.
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