(Reuters) – Palo Alto Networks Inc forecast second-quarter profit well below Wall Street expectations on Monday, as the cyber security firm grapples with higher costs and rising competition, sending its shares down about 8% in extended trading.
The company expects second-quarter adjusted profit between $1.11 and $1.13 per share, while analysts were expecting $1.30, according to IBES data from Refinitiv.
Palo Alto also said it would buy Aporeto Inc for $150 million in cash. The Santa Clara-based company has been on an acquisition spree as it looks to bolster its market share in a highly competitive cyber security industry.
Earlier this year, it had acquired companies including IoT security provider Zingbox and Twistlock.
Palo Alto’s competes in a market dominated by traditional firewall provider Cisco Systems Inc, Check Point Software Technologies and Juniper Networks Inc.
Net loss widened to $59.6 million, or 62 cents per share, from $38.3 million, or 41 cents per share, a year earlier.
Palo Alto’s operating expenses jumped about 20% to $606 million in the quarter.
Excluding items, the company earned $1.05 per share, and analysts’ on average were expecting a profit of $1.03 a share.
Revenue rose 18% to $771.9 million in the first quarter ended Oct. 31, beating analysts’ expectations of $767.8 million, according to IBES data from Refinitiv.
Shares of the company have risen about 33% this year.
Reporting by Chinmay Rautmare in Bengaluru; Editing by Amy Caren Daniel