CHKP ($47-$37) P/E 31...beats by 1 cent, rev's slightly light....
15-Jan-02
06:46 ET Check Point Sftwr (CHKP) 44.42: Reports Q4 net of $0.30 a share, $0.01 better than consensus, vs yr-ago EPS of $0.31. Rev. declined 13% to $122.53 mln (consensus $123.15 mln). No guidance issued with the report.
but tentative about when growth might improve...
15-Jan-02
08:51 ET Check Point Sftwr (CHKP) 39.70: -- Update -- During earnings conference call, co said that Q1 should be slightly down but in-line with ests, and Q4 should "hopefully" mark a return to growth (analysts had predicted quarterly growth to resume in Q3). Stock is down about 10.6% in pre-open trading.
Archive Headline
15-Jan-02
15:50 ET Check Point Sftwr (CHKP) 38.75 -5.67 (-12.8%): -- Update -- Lehman downgrades to MKT PERFORM from Buy. Firm remains concerned about firewall saturation, continued service provider weakness, and the risk of pricing pressure and share loss due to increasing competition from appliance vendors in the VPN mkt. Believes stk has downside to the low $30s.
Tuesday January 15, 12:29 pm Eastern Time
Check Point Software sees first quarter flat or down
(UPDATE: Adds byline, analyst quotes, updates and adds detail to stock price)
By Ilaina Jonas
NEW YORK, Jan 15 (Reuters) - Israeli Internet security company Check Point Software Technologies Ltd.(NasdaqNM:CHKP - news) on Tuesday said profits fell in the fourth quarter, as expected, and warned they would not improve in the first quarter.
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Check Point shares tumbled 10 percent, or $4.47, to $39.95, making it the second-leading net loser on the Nasdaq Stock Market, where its shares were among the most actively traded.
Check Point's net profit fell to $77 million, or 30 cents per diluted share in the fourth quarter from $81 million, or 31 cents per share, a year earlier. Revenues slipped to $122.5 million from $140.4 million a year ago, although sales rose 4 percent from the previous quarter.
Analysts on average had expected the company to earn 29 cents per share for the quarter, with an average revenue estimate of $122.26 million, according to Thomson Financial/First Call.
``I think it's a let down that they didn't actually provide guidance for sequential increase in revenue in the March quarter,'' Davenport & Co. analyst Drake Johnstone said. ``I just think it's probably not unexpected that the shares would probably pull back some just because they've gone so far from their low.''
Before Tuesday's dive, Check Point shares had doubled from their low of $19.56 in September, outperforming the S&P Software Index (^GSPCMSF - news). But the drop on Tuesday now has Checkpoing underperforming the index by 2 percent.
Check Point, based in Tel Aviv and Redwood City, California, is the market leader for firewall and virtual private network software that protects corporate networks from intruders.
Chairman and Chief Executive Gil Shwed said results for the year would be hard to predict because the global economy is sluggish, and yet network security has been a high priority for customers.
``Both of these translate to a limited visibility in our business,'' Shwed said during a conference call with analysts. ``We would like to be cautious on our Q1 guidance.''
Shwed said he expects first-quarter revenue and earnings to be flat or slightly down from the quarter just ended, reflecting a tendency for fourth-quarter results to be fueled by use-it-or-lose-it budgetary considerations by customers.
The company expects first-quarter earnings to meet analysts' average expectation of 29 cents a share, as calculated by First Call.
``We do expect to see growth in Q2 and higher growth rates through economic recovering in the second half of the year,'' Shwed said.
``Given given the move of the market since early September, I think investors may have been optimistic about the company's results for the March quarter,'' Johnstone said. ``I think you're going to have quite a few companies that that their March quarter, may not be up from the current quarter may be flat sequentially.''
Johnstone, who has rated the shares a ``buy,'' raised his 12-month price target for Check Point stock to $55, from $27 and set a 2002 earning estimate of $1.32 and $1.59 for 2003.
In the fourth quarter, the company used about $4.5 million from deferred revenue -- business from previous quarters that had been recorded on the company's balance sheet but not yet recognized as revenue in an earnings report -- to make its numbers.
That contributed to the stock's dive, Bear Stearns analyst Bob Lam said.
``The deferred revenue, which is an indication of the health of the balance sheet, was down,'' Lamm said. ``That was seen as a negative. The second thing is the guidance for Q1 and the rest of 2002 is still fairly cautious.''
Check Point said it ended 2001 with $1.03 billion in cash and interest bearing investments, which the company said it would use as insurance reserved for the future. However, executives did not rule out using some for a future acquisitions.
``Right now the high-growth segment is the one we're in,'' President Jerry Ungerman told Reuters. ``So there's a lot of growth opportunities for us right there without us going out and doing a acquisition. So if something makes sense within what we're focused on and what we're doing we can and would do an acquisition possible purchase would.''
For the year, Check Point posted net income of $322 million, or $1.25 per diluted share, up 49 percent from the previous year and meeting the high range of its previous outlook. Revenues for the year rose 24 percent to $528 million from $425 million. |
