October 23, 2013 / 10:43 PM / in 4 years

Fortinet beats estimates as software renewals rise

(Reuters) - Network security software maker Fortinet Inc reported quarterly results above analysts’ estimates, helped by strong demand for support services and higher software renewals.

Service revenue, which accounted for a majority of Fortinet’s total revenue of $154.7 million, was up 20 percent in the third quarter.

The company, a maker of firewalls, anti virus software and tools to speed up data across networks, said it expects fourth-quarter earnings of 13-14 cents per share on revenue of $162-$167 million.

Analysts were expecting earnings of 15 cents per share on revenue of $167.3 million.

“Their guidance is more a reflection of conservatism given the macro headwinds, which the investors have seem to taken in stride,” William Blair and Co analyst Jonathan Ho said.

Fortinet shares were up 8 percent in after-hours trading.

The company’s net income fell to $11 million, or 7 cents per share, in the third quarter, from $17.2 million, or 10 cents per share, a year earlier.

Excluding items, the company earned 12 cents per share.

Analysts had expected earnings of 11 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose 14 percent to $154.7 million, ahead of analysts’ expectations of $151.1 million.

The company also reaffirmed its July guidance for billings revenue for the fourth quarter.

Shares of the Sunnyvale, California-based company were trading at $22.5 in extended trading after closing at $20.56 on the Nasdaq on Wednesday.

Reporting By Aditya Kondalamahanty in Bangalore; Editing by Maju Samuel

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