Fortinet Beats Estimates, to Split Stock

Fortinet's guidance and CFO comments have been added to this story.

SUNNYVALE, Calif. (TheStreet) -- Fortinet's(FTNT) star is still firmly on the rise, if the security specialist's first-quarter results, released after market close Wednesday, are anything to go by.

The hardware maker reported revenue of $93.3 million, an increase of 34% compared to the same period last year, and a post comfortably above analysts' estimate of $86.9 million.

Excluding items, Fortinet earned 17 cents a share, up from 8 cents a share in the prior year's quarter. Analysts surveyed by Thomson Reuters were looking for earnings of 14 cents a share.

"The first quarter marked a strong start to the year for Fortinet with solid execution and a healthy pipeline of business," said Fortinet CEO Ken Xie, in a statement. "Our recent investments in our global sales organization and sharpened focus on penetrating the large enterprise have resulted in significant momentum in our business across geographic regions."

Boosted by demand for its products, the company increased its cash position during the first quarter. Fortinet exited the period with $432.7 million in cash and investments, compared to $387.5 million in the same quarter last year. Fortinet's cash flow from operations was $40.2 million, up from $21.8 million 12 months ago.

"I don't think that there were any negatives that we saw [during the quarter]," Fortinet CFO Ken Goldman told TheStreet. "We were able to overcome a couple of challenges in Japan and the turmoil in the middle east - we were able to compensate for that in other areas."

Fortinet's total billings in the Americas, for example, rose 64% year-over-year, according to the CFO.

For the second quarter ending in June, Fortinet expects revenue between $95 million and $96 million and earnings between 16 cents and 17 cents a share. Analysts currently anticipate sales of $92.1 million and earnings of 15 cents a share.

For the whole of fiscal 2011, the security outfit raised its guidance, predicting revenue between $390 milion and $400 million, compared to its previous range between $370 million and $385 million.

Excluding items, Fortinet is now looking for full-year earnings between 69 cents and 71 cents a share, up from its earlier forecast of 62 cents to 64 cents a share.

Analysts surveyed by Thomson Reuters had predicted revenue of $383.3 million and earnings of 64 cents a share.

Fortinet also announced a two-for-one stock split on Wednesday, with the additional shares scheduled for delivery on or around June 1. Once the stock split is completed, Fortinet will have roughly 153 million shares of common stock outstanding.

Investors responded positively to Fortinet's numbers and news of its stock split. Shares of the Cisco(CSCO) and Check Point(CHKP) rival climbed $3.03, or 7.26%, to $44.76 in extended trading on Wednesday.

The Silicon Valley firm has been attracting plenty of attention thanks to its FortiGate appliance, a sort of Swiss Army knife for network security: it combines firewall, anti-virus, VPN and intrusion prevention systems.

Fortinet, which recently hit a new 52-week high, is one of TheStreet's breakout stocks, and has even been touted as an attractive acquisition target for IBM(IBM) and HP(HPQ).

--Written by James Rogers in New York.

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