Check Point Q4 profit beats expectations

TEL AVIV: Internet and network security provider Check Point Software Technologies  on Thursday reported record quarterly results that beat expectations and said it was optimistic for 2010.

Its shares gained 3 percent in early Nasdaq trading to $34.17, just shy of a one-year high of $34.97 set nine days ago.

Israel-based Check Point posted fourth-quarter net profit excluding one-off items of 61 cents a share, up from 50 cents a year earlier. Revenue rose 25 percent to $272 million.

Check Point had been expected to earn 57 cents excluding items on revenue of $257.76 million, according to Thomson Reuters I/B/E/S.

"We continue to view the firewall/VPN market as very competitive, though we view Check Point as one of the strongest players in this market," Goldman Sachs analyst Sarah Friar said, maintaining a "neutral" rating.

RBC Capital Markets analyst Robert Breza said Check Point posted a "blowout quarter across all metrics".

Chairman and Chief Executive Gil Shwed attributed the strong results to the April acquisition of Nokia's security appliance business as well as sales growth from all product lines and all regions, especially Asia Pacific.

"Customers are adopting new versions of our products," he told reporters.

Shwed said recent cyber attacks on Google Inc's China operations raised the awareness among enterprises of the need for security.

"The good news is that whoever used our systems has been protected," he said.

Following the Nokia purchase, Check Point is seeking more acquisitions, Shwed said.

"We will probably make one-to-two small purchases of technology a year," he said, adding that Check Point was also interested in buying companies, though he noted there were not many to buy in security.

The company has $1.85 billion in cash and investments.

Shwed said the company was entering 2010 "cautious but optimistic".

"My sense is that customers are relatively optimistic," he said. "We are seeing more interest in new projects."

Check Point forecast first-quarter EPS excluding items of 48 to 55 cents and revenue of $232 million to $245 million. For the full year of 2010 it sees revenue of $990 million to $1.04 billion and EPS ex-items of $2.20 to $2.30.

Analysts expect Check Point to earn 52 cents excluding items on revenue of $237.7 million in the first quarter, according to Thomson Reuters I/B/E/S. For the full year it is expected to earn $2.24 a share on revenue of $1.01 billion.

The company is expanding its share buyback programme, enabling the purchase of up to $250 million for the year.