Palo Alto Networks Inc. scheduling its earnings call on a Friday afternoon — almost unheard of on Wall Street — whiplashed investors who had seen it as a red flag and dumped the stock, only to pile back in for one of the company’s most active sessions ever.
(Bloomberg) — Palo Alto Networks Inc. scheduling its earnings call on a Friday afternoon — almost unheard of on Wall Street — whiplashed investors who had seen it as a red flag and dumped the stock, only to pile back in for one of the company’s most active sessions ever.
More than 20 million shares were exchanged Monday as Palo Alto rose as much as 17%, the most since August 2021, helping it erase the 17% slide that followed the Aug. 2 announcement of the highly unusual late Friday call. That was the second-most active post-earnings trading session, and the seventh highest overall since it went public in 2012.
The reporting time fed paranoia that results might disappoint amid an industry slowdown and soft earnings results from peer Fortinet Inc. earlier this month. Instead, Palo Alto surprised on the upside with a billings outlook that topped estimates.
Having taken heat for the timing — one analyst called it “one of the biggest PR disasters” in decades — Chief Executive Officer Nikesh Arora opened the earnings call by saying sorry.
“We apologize for the unique Friday afternoon earnings call, but clearly we’ve enjoyed the attention,” Arora said. Turns out the timing was merely a practical choice to accommodate management’s schedule and an upcoming conference.
Analysts aren’t holding the timing snafu against Palo Alto. Of the 45 covering the stock, 39 still recommend buying, while none advise selling.
The last time Palo Alto’s stock saw this much market action around earnings was after the second quarter of 2017, when the stock slumped 24%.
Palo Alto is just the third S&P500 Index company to report on a Friday afternoon since 2018. Nike Inc. sparked rumors it would announce a deal to buy Peloton Interactive Inc. in December 2020, while On Semiconductor Corp. reported at the end of the week in February 2018.
All three solidly beat analysts expectations, but only Palo Alto’s shares rose in Monday trading following the Friday results.
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