The 10-second takeaway
For the quarter ended June 30 (Q2), Fortinet beat expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded. Non-GAAP earnings per share shrank. GAAP earnings per share shrank significantly.
Margins contracted across the board.
Fortinet logged revenue of $147.4 million. The 22 analysts polled by S&P Capital IQ foresaw sales of $142.6 million on the same basis. GAAP reported sales were 14% higher than the prior-year quarter's $129.0 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.10. The 24 earnings estimates compiled by S&P Capital IQ forecast $0.10 per share. Non-GAAP EPS of $0.10 for Q2 were 17% lower than the prior-year quarter's $0.12 per share. GAAP EPS of $0.05 for Q2 were 38% lower than the prior-year quarter's $0.08 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 70.4%, 80 basis points worse than the prior-year quarter. Operating margin was 9.3%, 660 basis points worse than the prior-year quarter. Net margin was 6.1%, 470 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $152.4 million. On the bottom line, the average EPS estimate is $0.13.
Next year's average estimate for revenue is $599.6 million. The average EPS estimate is $0.49.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 100 members out of 111 rating the stock outperform, and 11 members rating it underperform. Among 25 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 22 give Fortinet a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Fortinet is outperform, with an average price target of $22.30.
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