The security firm FireEye saw its common stock sink by more than 20 percent on Thursday (Nov. 5) in the wake of missed quarterly results and guidance that disappointed investors. The company said that a slowed Chinese hacking environment hit U.S. and European demand.
Shares skidded 23 percent to end the day at $22.39, within shouting distance of its $20 IPO price seen in 2013. The results: Sales were up 45 percent year over year to $165 million, within range of management guidance. The billings number spooked investors, as it tends to be a measure of short-term demand, and that was at $210 million, below the expected range of $225 million to $230 million. The company also slashed its full year guidance to $620 million to $628 million, down from $630 million to $645 million. European weakness led to the billings miss, and the company said the U.S./China agreement to staunch hacking had actually hurt sales.
That explanation, Reuters reported, met with skepticism among sell-side analysts on Wall Street, with evidence from other companies and enterprise spending that hacking and cyberthievery concerns have reached and attained strong momentum. The analysts instead said that competition had been heating up from peer cybersecurity firms and that the company itself may have seen slowing demand amidst high-level executive turnover. Other firms have said this reporting season that demand remains robust for cybersecurity products, with no slowdown in evidence or comparable missed results.
[bctt tweet=”FireEye maintained that its explanations have been grounded in reality.”]
Yet, the beleaguered tech outfit maintained that its explanations have been grounded in reality, with one spokesperson telling the newswire that “we can see what others can’t. We’re convinced the threat landscape is every bit as dangerous as it ever was, but short term, the decrease of market urgency has changed the buying patterns.”
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