TEL AVIV (Reuters) - Shares in computer security provider Check Point Software Technologies (CHKP.O) plunged on Wednesday after it issued a wider than usual range for fourth-quarter results forecasts, citing economic uncertainty.
The conservative outlook sent Check Point's shares down 12.5 percent to a new year-low of $41.49, despite higher than expected third quarter earnings.
"We still expect a very strong quarter," Chairman and Chief Executive Gil Shwed told a news conference. "We were relatively conservative, due to uncertainty in Europe."
Israel-based Check Point forecast revenue of between $355 million and $387 million in the fourth quarter and earnings per share (EPS) before one-off items of 84-91 cents. Analysts have forecast profits of 90 cents per share on $382 million revenues.
According to Reuters' calculations, that would bring its full-year revenue outlook to $1.329-$1.361 billion and EPS to $3.13-$3.20, from previous forecasts of $1.345-$1.395 billion in revenue and EPS of $3.10-$3.20.
On Tuesday, rival network security products maker Fortinet Inc (FTNT.O) cut its full-year forecast, hurt by weak demand in southern Europe and slow growth in China, sending its shares down 18 percent.
Check Point's growth in the third quarter was boosted by sales of security appliances that combine hardware and software as well its software "blades" - modular software building blocks that prevent network intrusion and are bought on an annual subscription basis.
"Geographically, North America continued to deliver great results with double digit growth in product and service revenues," Shwed said.
FBN Securities cut its price target for Check Point to $60 from $70 but retained an "outperform" rating.
"The big negative in this report is the negative growth in billings as the company pointed to weakening trends in Europe," analyst Shebly Seyrafi said. "However, there are questions about increased competition, particularly from Palo Alto Networks (PANW.N), on Check Point's growth."
Palo Alto Networks, which sells firewalls to businesses that prevent data breaches and block malware and viruses, went public in July.
Check Point posted third quarter EPS excluding one-off items of 79 cents, compared with 72 cents a year earlier. Revenue rose 8 percent to $332.4 million.
It had been expected to earn 78 cents a share on revenue of $332.4 million, according to Thomson Reuters I/B/E/S. (Editing by Robin Pomeroy)