Sophos Group PLC (LON:SOPH) shares were in need of protection on Wednesday after the IT security specialist’s first-half performance and outlook disappointed.
The FTSE 250 group reported a 3% rise in first-half billings to US$353mln, below previous guidance of 6%.
READ: Deutsche Bank downgrades Sophos
In July’s first-quarter update, it had warned that growth wouldn’t be as explosive as prior years, given the particularly tough comparatives in the year-ago period.
Sophos had, though, hoped to return “mid-teens” billings growth in the second half, but it is now guiding for just a “modest improvement”.
As for next year, Sophos expects to see a “significant improvement” in year-on-year billings growth.
But it failed to repeat its prior targets for US$1bn in billings and more than US$100mln in adjusted operating profits, leading analysts to believe they have been pushed out.
“We provisionally expect to ease down our estimates for FY19 and FY20 by c5% at the billings line,” said Shore Capital.
Back to the first half, Sophos swung to a pre-tax profit of US$26mln, reflecting an 18% rise in revenue to US$350mln and foreign exchange tailwinds.
Shares took a beating on Wednesday, down 25.9% to 338.4p.
-- Updates for share price and analyst comment --