Check Point Software Technologies Ltd. (Nasdaq: CHKP) does not usually disappoint. However, more is apparently expected of the network security company, which regularly beats analysts' estimates. Despite good first quarter financials released today, the company's stock opened with an 8% drop on Wall Street.
The cause was apparently the company's revenue guidance, which was a little lower than the analysts' estimate, at $324-336 million for the current quarter, compared with a consensus estimate of $333 million. The company guides for earnings per share of $0.74-0.77 for the quarter, pretty much in line with the estimates.
For the first quarter, Check POint reported an 11% rise in revenue, in comparison with the corresponding quarter of 2011, to $313.1 million. Non-GAAP earnings per share rose 16%, from $0.64 to $0.74.
The consensus analysts' estimate was for earnings per share of $0.72 on revenue of $312.81 million.
Non-GAAP operating profit totaled $186.7 million, 16% more than the operating profit of $160.6 million in the corresponding quarter, and representing 60% of revenue, compared with 57% in the corresponding quarter.
Non-GAAP net profit totaled $156.9 million, 14% more than the $137.1 million posted in the corresponding quarter.
On GAAP basis, net profit was $143.6 million, representing an increase of 18% in comparison with $122.1 million in the first quarter of 2011. GAAP earnings per diluted share were $0.68, 19% up compared with $0.57 in the first quarter of 2011.
Cash flow from operations was $275.3 million, an increase of 30% compared with $211.6 million in the first quarter of 2011.
"I am very pleased with our strong start to the 2012 calendar year. Check Point delivered record first quarter results with good growth across all of our key financial metrics. The growth was driven by our latest network security appliances and the continued strength of our annuity software blades," said Check Point founder, chairman, and chief executive officer Gil Shwed.
A considerable part of the company's post-results conference call centered on the ThreatCloud solution that it launched a week ago. This represents a new approach to information sharing about threats on the network, but it is based on infrastructure that Check Point has developed over the past twenty years.
In effect, Check Point will use every protection system it provides as a sensor for identifying attacks on enterprises that have bought it. The information will be held on a database at Check Point. Information about an attack on one enterprise is critical for protecting others, says Shwed, and the joint database will assist in this respect.
Published by Globes [online], Israel business news - www.globes-online.com - on April 23, 2012
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