Arista Networks' stock drops after weak Q2 forecast

Arista Networks' stock dips 15% in after hours trading Thursday night after reporting lower sales guidance for the second quarter. (Pixabay)

The weekend can't come soon enough for Arista Networks after its stock dropped on the heels of a weak second-quarter forecast.

The cloud-based software provider's stock dropped more than 15% in after-hours trading Thursday night after announcing it had lowered its second-quarter revenue guidance to between $600 million and $610 million, which was below analyst forecasts of $639 million.

Arista's stock, which has seen its value increase 47% this year, opened at $261.90 this morning before increasing to $266.31 by noon.

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Arista said it was expecting lower sales in the second quarter due to slow growth by a hyperscale cloud provider. While the firm didn't say which cloud provider was expecting slower growth in the second quarter, analysts pointed to Microsoft, according to a story by MarketWatch.

RELATED: Arista to pay Cisco $400M to resolve long-standing patent case

The company, which primarily competes against Cisco, lowered its expectations for gross margin to 64% and 65% and operating margin to about 36%. In the first quarter, Arista reported net income of $187.7 million, or $2.31 a share compared to $134.1 million, or $1.66 a share, in a year ago.

Arista's revenue was $595 million, which was flat compared to the fourth quarter last year and an increase of 26% from same quarter a year. Arista's grows margin was 64% compared to 64% a year ago.

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