* Q2 EPS ex-items $0.77, vs $0.76 forecast
* Q2 revenue up 9 percent to $329 million
* Sees Q3 EPS ex-items $0.74-$0.81, rev $316-$345 mln
* To buy back up to $1 bln of shares in next two years
* Shares climb 10 pct on Nasdaq
By Tova Cohen
TEL AVIV, July 18 Israel-based computer security
firm Check Point Software Technologies posted higher
quarterly profit and kept its full-year targets, easing fears
that companies might cut spending on their networks in a
faltering global economy.
Check Point said on Wednesday new products like ThreatCloud,
which allows businesses to team up to fight cyber crime, were
helping it to gain market share, and also announced plans to buy
up to $1 billion of its shares in the next two years.
Its shares, hit recently by fears of slowing demand, jumped
10 percent in early Nasdaq trading.
"We take (the) current performance as a sigh of relief given
the Street's expectations and some observers' expectations for
negative results," said Oppenheimer analyst Shaul Eyal.
He estimated the share buyback could boost earnings per
share by 25 to 30 cents over the next two years.
Check Point posted earnings per share excluding one-off
items of 77 cents in the second quarter, compared with 68 cents
a year earlier. Revenue rose 9 percent to $329 million.
Check Point had been expected to earn 76 cents a share on
revenue of $331 million, according to Thomson Reuters I/B/E/S.
Billings grew 9 percent, which investors should view
positively, Nomura analyst Rick Sherlund said, adding that
"given the 29 percent pullback in the stock since first quarter
earnings, we believe the stock was discounting a worse result".
"We have seen great acceptance of our new security
appliances as a platform of choice for security consolidation,"
Check Point Chairman and CEO Gil Shwed said, noting sales of
enterprise appliance units grew more than 20 percent.
Such appliances, which combine hardware and software,
account for over 80 percent of the company's revenue, Shwed told
a news conference.
Check Point continues to take market share from competitors
such as Cisco Systems and Juniper Networks,
Shwed said. In April he estimated Check Point has more than 40
percent of the enterprise security market.
Shwed said he did not see Palo Alto Networks, a competing
designer of Internet firewalls that plans to go public on
Friday, as a major threat to Check Point, the world's biggest
pure-play network security company.
Palo Alto coined the term "next generation firewall" to
describe its products, which let companies tightly control
access to Internet applications for specific
"They are still a niche player," Shwed said, arguing that
Check Point's a pplication control technology was better.
Though Shwed said he did not see pressure on prices from the
competition, customers are buying smaller models that provide
Shwed said revenue growth had slowed due to economic
pressures in Europe, where a weaker euro reduced the purchasing
power of Check Point customers. On the other hand, the stronger
dollar lowered company expenses by $6 million and Shwed said new
markets were boosting growth.
Europe accounts for 39 percent of Check Point's sales, while
44 percent come from the United States.
For the third quarter, Shwed forecast revenue of between
$316 million and $345 million and earnings per share before
one-off items of 74-81 cents. The company is forecast by
analysts to earn 79 cents on revenue of $339.9 million.
Shwed said Check Point was providing a wider than usual
forecast range due to the economic problems in Europe.
The company maintained its full-year outlook for revenue of
$1.345-$1.395 billion and adjusted EPS of $3.10-$3.20.