UPDATE 1-Check Point Q2 profit beats estimates, outlook in line

Wed Jul 23, 2014 9:29am EDT

* Q2 EPS ex-items $0.89 vs $0.87 forecast

* Q2 revenue $363 mln vs $359.5 mln forecast

* Sees Q3 EPS ex-items $0.88-$0.92, revenue $355-$375 mln (Adds Q3 outlook, CEO and analysts comments)

By Tova Cohen

TEL AVIV, July 23 (Reuters) - Network security provider Check Point Software Technologies topped second quarter profit forecasts on strong demand for subscriptions for its threat prevention and other software.

Check Point earned 89 cents a share excluding one-time items in the second quarter, up from 83 cents a year earlier. Revenue grew 7 percent to $363 million, the Israel-based company said.

Check Point, a leader in the corporate fight against cyber crime and computer viruses, was forecast to have earned 87 cents a share on revenue of $359.5 million, according to Thomson Reuters I/B/E/S.

"As cyber security spending continues to be strong, Check Point is at the right place at the right time to benefit from healthy secular trends," FBR analyst Daniel Ives said.

Revenue from its software blades - modular software building blocks bought on an annual subscription basis - was especially strong with growth of 22 percent, Chief Executive Officer Gil Shwed told a news conference on Wednesday.

"This was one of the better quarters I can remember," he said. "We saw a nice uptick in customer wins across the board with several very large customer contracts," he said, noting that some of these contracts reached eight digits.

During the quarter Check Point launched ThreatCloud IntelliStore, which enables organisations to choose from a range of threat intelligence feeds relevant to them and use this intelligence to stop threats.

Shwed forecast third-quarter revenue of $355 million to $375 million and earnings per share excluding one-time items of 88-92 cents. Analysts on average estimated revenue of $366 million and EPS of 90 cents and Ives called the forecast "good enough".

"We see no change in competitive dynamics enabling Check Point to maintain its smooth sailing," Oppenheimer analyst Shaul Eyal said.

Check Point, which has over $3.6 billion in cash, is seeking to use some of its funds for mergers and acquisitions.

A strong shekel hurt the company's bottom line by 1 cent per share in the second quarter, as local expenses increased in dollar terms. (Reporting by Tova Cohen; Editing by Steven Scheer)