Check Point Beats Q3 Revenue ExpectationsBy Reuters | Posted 2008-10-28 Email Print
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Analysts say the security software vendor's surprising results in a trying economic climate reflects the resilency of the security technology market.
TEL AVIV, Oct 28 (Reuters) - Check Point Software Technologies, one of the world's largest Internet and network security companies, posted strong quarterly results on Tuesday and provided an upbeat outlook despite the worsening economic climate.
The news sent the Israel-based company's Nasdaq-listed shares surging 7 percent in morning trade.
Chairman and Chief Executive Gil Shwed said Check Point does not expect to lay off any workers, even though many of its clients are being hurt by the global slowdown.
He told a news conference it was hard to predict how the economic crisis would affect the company in the long term.
"We see projects being cancelled but we also see projects being initiated. Clients are buying. It's not that the world has stopped, but they are cutting costs," he said.
Security was a sector that companies were continuing to invest in, he added.
Shwed also said the decline in company share prices created opportunities for acquisitions but any deal would be based on strategy, not price. Check Point has $1.4 billion in cash.
Check Point reported third-quarter net income rose to $80.1 million, or 37 cents per diluted share, from $76.7 million, or 34 cents a share, a year earlier.
Excluding one-time items such as a $2.3 million write-down related to impairment of Lehman Brothers bonds, the company earned 44 cents a share compared with 41 cents a year earlier.
Revenue rose 9 percent to $199.7 million.
Check Point was forecast to earn 43 cents a share excluding one-time items on revenue of $200 million, according to Reuters Estimates.
"We believe Check Point's solid results in a challenging economic environment are a positive indicator for other security companies, including McAfee and Symantec," RBC Capital Markets analyst Robert Breza said in a research note.
For the fourth quarter, Check Point forecasts revenue of $209 million to $228 million and earnings per share of 34 cents to 44 cents, or 45 cents to 51 cents excluding one-time items.
Although many companies have slashed their forecasts, Check Point's outlook is in line with analysts' estimates.
Check Point is forecast to earn 48 cents a share excluding one-time items in the fourth quarter on revenue of $218.5 million, according to Reuters Estimates.