Palo Alto Loss Widens, Settles Lawsuit With Juniper Networks; Stock Up 10%

(RTTNews) - Network security software maker Palo Alto Networks Inc. (PANW), Thursday reported a third-quarter loss that widened from a year ago, hurt largely by a one-time legal settlement costs. The company said it agreed to pay $175 million to settle patent litigations with Juniper Networks Inc. (JNPR).

Meanwhile, adjusted profit for the quarter improved from a year ago, as revenues soared 49 percent. Following the news, shares of Palo Alto Networks rallied ten percent in extended trade.

Santa Clara, California-based Palo Alto's third-quarter loss widened to $139.1 million or $1.86 per share from $7.3 million or $0.10 per share last year.

Results for the quarter, among other items, included a hefty legal settlement expense of $113.7 million.

Excluding special items, adjusted earnings for the quarter improved to $8.7 million or $0.11 per share from $5.3 million or $0.07 per share last year.

On average, 16 analysts polled by Thomson Reuters expected earnings of $0.10 per share for the third quarter. Analysts' estimates typically exclude special items.

Palo Alto, which provides network security technologies, said revenues for the third quarter surged 49 percent to $150.7 million from $101.3 million a year ago. Twenty-two analysts had a consensus revenue estimate of $146.22 million for the quarter.

"We reported record revenue in our third quarter driven by strong customer demand for our next-generation enterprise security platform. We achieved the highest rate of new customer acquisition in our history and now serve more than 17,000 customers globally," said Chief Executive Mark McLaughlin.

The company reached a settlement with Juniper Networks resolving all the patent litigation between both companies. Palo Alto has agreed to pay Juniper Networks a one-time settlement amount of about $175 million, consisting of $75 million in cash, about $70 million in shares and a warrant to purchase around $30 million of common stock.

PANW closed Wednesday's trading at $69.51, down $0.10 or 0.14%, on the Nasdaq. The stock, however, surged $6.90 or 9.93% in after-hours trade.