Share of Fortinet, Inc. (FTNT) soared more than 16 percent in extended trade on Wednesday after the network security solutions provider reported results for the fourth quarter that topped analysts' expectations. The company also reported a profit for the quarter that grew from last year, reflecting improved operating margins and strong double-digit revenue growth.
"We reported strong fourth quarter results, which exceeded our expectations across all of our key operating metrics. We had particularly strong growth in revenue, profitability, and cash flow generation, and ended the quarter with a cash, cash equivalents and investments balance of approximately $740 million with no debt," interim CFO Ken Xie said in a statement.
The Sunnyvale, California-based company reported net income of $21.50 million or $0.13 per share for the fourth quarter, higher than $16.49 million or $0.10 per share in the prior-year quarter.
Excluding items, adjusted net income for the quarter was $28.09 million or $0.17 per share, compared to $22.27 million or $0.14 per share in the year-ago quarter.
On average, 26 analysts polled by Thomson Reuters expected the company to report earnings of $0.15 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Total revenue for the quarter increased 25 percent to $151.16 million from $120.86 million in the same quarter last year, and topped twenty-three Wall Street analysts' consensus estimate of $144.20 million.
The company's deferred revenue as of the end of the fourth quarter stood at $363.2 million, and billings grew 24 percent year-over-year to $174.3 million.
Product revenues for the quarter rose 24 percent to $71.03 million from a year ago, and services revenues were $76.71 million, up 26 percent from last year. Ratable product and services revenue grew to $3.43 million from $2.32 million last year.
Operating margin for the quarter improved 100 basis points to 23 percent from last year's 22 percent, while adjusted operating margins remained flat at 27 percent.
For fiscal 2012, the company reported net income of $66.84 million or $0.40 per share, higher than $62.49 million or $0.38 per share in the prior year.
Excluding items, adjusted net income for the year was $82.29 million or $0.53 per share, compared to $73.15 million or $0.45 per share in the year ago. Analysts expected the company to report earnings of $0.51 per share for fiscal 2012.
Total revenue for the full year increased 23 percent to $533.64 million from $433.58 million in the previous year. Street was looking for full-year 2012 revenues of $526.64 million.
"We are confident, yet cautious, as we enter 2013 and remain focused on further gaining market share worldwide by delivering innovative new products, and expanding our sales, marketing and R&D infrastructure," Xie added.
FTNT closed Wednesday's regular trading session at $19.35, down $0.36 or 1.83% on a volume of 5.64 million shares. However, the stock soared $3.16 or 16.33% in the extended hours trading.
by RTT Staff Writer
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