Fortinet Beats on Both Top and Bottom Lines

Fortinet (Nasdaq: FTNT  ) reported earnings on Jan. 30. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Fortinet beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share increased significantly.

Gross margins shrank, operating margins were steady, net margins expanded.

Revenue details
Fortinet tallied revenue of $151.2 million. The 24 analysts polled by S&P Capital IQ hoped for revenue of $144.2 million on the same basis. GAAP reported sales were 25% higher than the prior-year quarter's $120.9 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.17. The 25 earnings estimates compiled by S&P Capital IQ predicted $0.15 per share. GAAP EPS of $0.13 for Q4 were 30% higher than the prior-year quarter's $0.10 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 72.6%, 50 basis points worse than the prior-year quarter. Operating margin was 23.2%, about the same as the prior-year quarter. Net margin was 14.2%, 60 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $139.6 million. On the bottom line, the average EPS estimate is $0.13.

Next year's average estimate for revenue is $618.9 million. The average EPS estimate is $0.61.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 98 members out of 111 rating the stock outperform, and 13 members rating it underperform. Among 21 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 18 give Fortinet a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Fortinet is outperform, with an average price target of $27.09.

Looking for alternatives to Fortinet? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, "3 Stocks That Will Help You Retire Rich." Click here for instant access to this free report.

• Add Fortinet to My Watchlist.