FireEye Inc (FEYE.O) shares lost about a quarter of their value Thursday as the former Wall Street darling missed quarterly forecasts and cut its outlook, saying reduced Chinese hacking had hurt U.S. demand and sales fell short in Europe.
Wall Street analysts and industry watchers said that they were skeptical of FireEye’s assertion that a U.S.-China agreement to clamp down on hacking had hurt sales at a time when corporations are placing unprecedented attention on efforts to beef up security.
This is an excuse for more tactical and execution problems,
said Eric Johnson, dean of Vanderbilt University’s Owen School of Management, who advises corporations on cyber technology.
Several analysts have said FireEye was affected by intensifying competition from rivals including Palo Alto Networks Inc (PANW.N), and that a string of recent executive departures could be hurting product development and sales.
Shares of FireEye, which released results late Wednesday, fell $6.73, or 23 percent, to $22.39 in midday Nasdaq trade. That knocked over $1 billion off the company’s market capitalization.
It was a record low since FireEye went public at $20 a share in September 2013.
About a week before the quarter ended, U.S. and Chinese leaders announced a “common understanding” that neither government would knowingly support cyber theft of corporate secrets.
FireEye Chief Executive Dave DeWalt said that agreement was hurting sales, as were cyber deals between China and other nations.
