Shares of NetScout Systems Inc. (NTCT) tumbled in after-hours trading on Monday, as the cybersecurity company revised its outlook for the year due to slower order conversions. The stock experienced a sharp drop of over 20%, following a 3.5% increase during regular trading hours, closing at $27.59.
Revised Expectations for Full-Year Results
NetScout now anticipates adjusted earnings between $2 to $2.20 per share for the full-year, down from its previous estimate of $2.20 to $2.32 per share. In terms of revenue, the company expects a range of $840 million to $860 million, which is lower than its previous forecast between $915 million and $945 million. Analysts had projected earnings of approximately $2.26 per share on revenue totaling $922.6 million.
Industry and Economic Headwinds Impact Revenue
Anil Singhal, the Chief Executive Officer of NetScout, stated that the revision in outlook is primarily due to industry and economic headwinds faced by their customers towards the end of the second fiscal quarter. These headwinds have begun to impact the company’s revenue and are expected to continue influencing performance in the second half of fiscal year 2024.
Second-Quarter Projections
For the upcoming second quarter, NetScout projects adjusted earnings in the range of 60 cents to 62 cents per share, with revenue expected to be between $195 million and $197 million. This falls short of analysts’ expectations of 54 cents per share on revenue amounting to $223.6 million.
NetScout’s downward revision reflects the challenges faced by the company in converting orders and highlights the impact of external factors on their business performance. The cybersecurity industry is currently navigating through a period of uncertainty, and NetScout’s revised outlook underscores the need for the company to adapt and strategize accordingly.