Palo Alto Networks makes yet another acquisition, stock sinks after earnings

Palo Alto Networks Inc. announced at least its eighth notable acquisition since the beginning of 2018 Monday afternoon, pairing the news once again with quarterly earnings that showed the effects of the rapid changes. The security-software company said it would acquire Aporeto, which helps identify and segment workloads across cloud and on-premises networks, for about $150 million in cash, and said that expenses would weigh on second-quarter earnings. Palo Alto Networks predicted adjusted second-quarter earnings of $1.11 to $1.13 a share, "which incorporates net expenses related to the proposed acquisition of Aporeto," the announcement noted. That was well shy of analysts' average forecast of $1.30 a share, sending shares down more than 7% in late trading. The rest of the company's report beat analysts' estimates, with first-quarter losses of $142.8 million, or 62 cents a share, on revenue of $771.9 million, up from $656 million a year ago. After adjusting for stock-based compensation and other effects, the company reported earnings of $1.05 a share, down from $1.17 a share a year ago. Analysts on average predicted adjusted earnings of $1.03 a share on sales of $768 million, according to FactSet. Palo Alto Networks reported two acquisitions along with earnings in May, after completing five acquisitions in roughly 12 months through the early part of 2019. The stock closed at $250.28 Monday, up 1.4% on the day and 32.9% so far this year; after the announcement, shares fell to less than $233 in the extended session.

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