UPDATE 2-Check Point profit beats estimate, 2013 outlook in line

Wed Jan 23, 2013 1:09pm EST

* Sees 2013 non-GAAP EPS $3.30-$3.50 vs $3.48 forecast

* Shares up 2.4 pct in morning trade

By Tova Cohen

TEL AVIV, Jan 23 (Reuters) - Computer security provider Check Point Software Technologies reported higher-than-expected fourth quarter profit on cost cutting and rising sales of security appliances that combine hardware and software.

Check Point recorded fourth-quarter earnings excluding one-off items of 91 cents a share compared with 84 cents in the same period in 2011. Revenue rose 3 percent to $369 million.

The company had been expected to earn 88 cents per share on revenue of $374 million.

"The company has shown a significant deceleration in its business over the past year and appears to be working harder to get to its numbers each quarter as competitive pressures from Palo Alto have grown," Nomura analyst Rick Sherlund said.

Smaller rival Palo Alto Networks last month said its revenue for the current quarter will grow 59-66 percent from a year earlier.

The Israel-based company forecast 2013 revenue of $1.4-$1.45 billion and earnings per share excluding one-off items of $3.30-$3.50. Analysts have also forecast earnings of $3.48 a share on revenue of $1.45 billion, according to Thomson Reuters I/B/E/S Estimates.

Check Point's growth in the fourth quarter was boosted by sales of security appliances combining hardware and software as well as its software "blades" - modular software building blocks that prevent network intrusion and are bought on an annual subscription basis.

Shares in the company rose 2.4 percent.

"The company has a handful of product catalysts over the coming year that, combined with healthy secular trends, should help accelerate product license growth during the course of 2013," said FBR Capital Markets analyst Daniel Ives.

In contrast to previous quarters where sales in Europe were soft, in the final quarter of 2012 it was the North American market that showed weakness while Europe stabilised, Check Point's chief executive Gil Shwed said, adding it was too soon to tell whether this was a one-time occurrence.

Shwed attributed the slowing revenue growth to the fact that some customers bought less expensive models, resulting in a decline in the average selling price even as the number of units sold rose.

Shwed said the company in 2013 will focus on cyber threats and mobile security, the two most pressing issues in the security industry.

In 2012 it introduced ThreatCloud, the first collaborative network to fight cyber crime, as well as software blades to detect and block the activity of bots - malicious software agents that hide inside computers awaiting instructions from their remote operators.

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