FireEye Shares Plunge 20% As Q3 Loss Sharply Widens, Trims 2014 Revenue Outlook

(RTTNews) - Shares of FireEye, Inc. (FEYE) plunged more than 20 percent in extended trading on Tuesday after the cybersecurity provider reported revenues for the third quarter that missed analysts' expectations. The company also trimmed revenue outlook for the full-year 2014.

The company reported a loss for the quarter that sharply widened from last year, despite strong triple-digit revenue growth, reflecting sharply higher operating expenses. However, adjusted loss per share came in narrower than Street estimates.

FireEye provides automated threat forensics and dynamic malware protection against the next generation of cyber attacks. The company has invented a purpose-built, virtual machine-based platform that provides real-time threat protection. It has over 2,700 customers across more than 67 countries.

"Our third quarter billings reflected strong demand for FireEye's advanced security solutions in an environment of escalating targeted attacks. Billings from new and existing customers were both at record levels as FireEye expanded its installed base and successfully cross-sold multi-vector solutions," Chairman and CEO David DeWalt said in a statement.

The Milpitas, California-based malware protection system company reported a net loss of $$120.03 million or $0.83 per share for the third quarter, compared to a net loss of $50.93 million or $1.61 per share in the prior-year quarter.

Excluding items, adjusted net loss for the quarter was $73.87 million or $0.51 per share, compared to a loss of $38.19 million or $1.21 per share in the year-ago quarter.

On average, 24 analysts polled by Thomson Reuters expected the company to report a loss of $0.56 per share for the quarter. Analysts' estimates typically exclude special items.

Results for the quarter were calculated on 144.92 million weighted average shares, compared to 31.59 million shares in the year-ago quarter.

Total revenues for the quarter surged to a record $114.21 million from $42.65 million in the same quarter last year, but missed twenty-one Wall Street analysts' consensus estimate of $116.02 million.

Product revenue for the quarter surged to $48.38 million from $23.73 million in the prior-year quarter, as well as subscription and services revenue soared to $65.84 million from $18.92 million last year.

Third-quarter billings totaled a record $165.12 million, sharply higher than $70.82 million last year. Deferred revenue totaled $282.9 million at the end of the third quarter.

Total operating expenses nearly tripled to $199.22 million from $76.61 million in the year-ago quarter.

Looking ahead to the fourth quarter, the company expects adjusted loss in a range of $0.46 to $0.50 per share, on projected revenues between $135 million and $147 million, with billings between $195 million and $210 million, while analysts are looking for a loss of $0.50 per share on revenues of $144.21 million.

For fiscal 2014, the company continues to expects loss in a range of $2.05 to $2.15 per share, while trimming revenue forecast to a range of $418 million to $430 million from the prior projection between $423 million and $430 million.

Street is currently looking for a full-year 2014 loss of $2.13 per share on annual revenues of $428.46 million.

FEYE closed Tuesday's regular trading session at $34.25, up $0.56 or 1.68% on a volume of 14.12 million shares. However, the stock plunged $6.96 or 20.32% in after-hours trading.