Network security company Fortinet beats estimates, software renewals rise

Network security software maker Fortinet Inc reported quarterly results above analysts’ estimates, helped by strong demand for support services and higher software renewals.

Service revenue, which accounted for a majority of Fortinet’s total revenue of $154.7 million, was up 20 percent in the third quarter.

The company, a maker of firewalls, anti virus software and tools to speed up data across networks, said it expects fourth-quarter earnings of 13-14 cents per share on revenue of $162-$167 million.

Analysts were expecting earnings of 15 cents per share on revenue of $167.3 million.

“Their guidance is more a reflection of conservatism given the macro headwinds, which the investors have seem to taken in stride,” William Blair and Co analyst Jonathan Ho said.

Fortinet shares were up 8 percent in after-hours trading.

The company’s net income fell to $11 million, or 7 cents per share, in the third quarter, from $17.2 million, or 10 cents per share, a year earlier.

Excluding items, the company earned 12 cents per share.

Analysts had expected earnings of 11 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose 14 percent to $154.7 million, ahead of analysts’ expectations of $151.1 million.

The company also reaffirmed its July guidance for billings revenue for the fourth quarter.

Shares of the Sunnyvale, California-based company were trading at $22.5 in extended trading after closing at $20.56 on the Nasdaq on Wednesday.

(Reporting By Aditya Kondalamahanty in Bangalore; Editing by Maju Samuel)

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Network security company Fortinet beats estimates, software renewals rise