Technology Other News 07 Feb 2019 FireEye forecasts su ...

FireEye forecasts surprise loss, shares fall

REUTERS
Published Feb 7, 2019, 10:00 am IST
Updated Feb 7, 2019, 10:00 am IST
Analysts on average were expecting a profit of 1 cent per share and revenue of $211.3 million.
Cybersecurity companies have benefited as organizations worldwide set aside budgets to shield against rising cyber crime. Severe attacks such as a denial-of-service can cripple entire organizations while malware and phishing often target individuals via emails.
 Cybersecurity companies have benefited as organizations worldwide set aside budgets to shield against rising cyber crime. Severe attacks such as a denial-of-service can cripple entire organizations while malware and phishing often target individuals via emails.

FireEye Inc forecast a surprise loss for the current-quarter after edging past earnings estimate for the last three months of 2018, sending the cybersecurity firm’s shares down 7 per cent in extended trading on Wednesday.

The company forecast first-quarter billings in the range of $170 million to $180 million, falling short of analysts’ expectations of $191.9 million.

 

“We had some significant growovers in Q1 of 2018 with deals greater than $10 million,” Chief Financial Officer Frank Verdecanna told Reuters. “If we take this into consideration, we get a more normalized growth rate for Q1 2019.”

Billings include revenue recognized plus the change in deferred revenue and is an important indicator of the health of a company’s business.

The Milpitas, California-based company forecast adjusted net loss of 2 cents to 4 cents per share and revenue in a range of $208 million to $212 million for the current quarter.

Analysts on average were expecting a profit of 1 cent per share and revenue of $211.3 million.

The disappointing forecast overshadowed the company’s fourth-quarter beat on revenue and profit, driven by its shift to a subscription-based model and cost cuts.

Cybersecurity companies have benefited as organizations worldwide set aside budgets to shield against rising cyber crime. Severe attacks such as a denial-of-service can cripple entire organizations while malware and phishing often target individuals via emails.

FireEye, which has probed some of the biggest cyber attacks to date including the Equifax Inc breach, said its operating costs dropped 5.8 per cent in the quarter.

Total revenue rose 5.7 per cent to $217.5 million, beating analysts’ average estimate of $216.8 million, according to IBES data from Refinitiv.

Revenue from subscription and services rose about 5 per cent to $178.8 million, while analysts were expecting $166.3 million.

Excluding one-time items, FireEye posted a profit of 6 cents per share, beating analysts’ estimates by 1 cent.

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