Palo Alto Networks Office

Image source: Palo Alto Networks, Inc.

What happened

Shares of Palo Alto Networks Inc. (NYSE:PANW) were down 13% as of 10:15 a.m. EST Tuesday after the network and enterprise security company released solid fiscal first-quarter 2017 results, but followed with disappointing guidance.

So what

Quarterly revenue climbed 34% year over year, to $398.1 million, including a 10.9% increase in product revenue, to $163.8 million, and 56.7% growth in services revenue, to $234.3 million. On the bottom line, that translated to 66.2% growth in adjusted net income, to $51.2 million,  and 61.8% growth in adjusted earnings per share, to $0.55.

By comparison, three months ago Palo Alto told investors to expect fiscal Q1 revenue of $396 million to $402 million -- the midpoint of which was slightly above its actual results -- and lower adjusted earnings per share of $0.51 to $0.53.

Now what

Similar to last quarter, investors were less than pleased with Palo Alto's outlook. For the current quarter, the company expects revenue of $426 million to $432 million, good for approximate year-over-year growth of 27% to 29%. That should result in adjusted earnings per share of $0.61 to $0.63. By contrast -- and though we don't usually pay close attention to Wall Street's near-term demands -- analysts' consensus estimates predicted fiscal Q2 revenue of $438.9 million, and adjusted earnings per share near the high end of Palo Alto's expected range.

During the subsequent conference call, Palo Alto Networks CEO Mark McLaughlin noted their fiscal Q1 results weren't as "robust" as they had expected. However, he also insisted this wasn't related to increasing competition, but rather the result of deals being pushed back given the need for "additional approvals" on increasingly bigger opportunities the company is winning with larger customers.

In any case, while the market may not take too kindly to the near-term consequence of these delays, that's an enviable problem to have. I think Palo Alto investors should be more than content with where their company stands today.

Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Palo Alto Networks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.