Check Point Gets Cheeky

Check Point Software Technologies Ltd. (Nasdaq: CHKP) reported its third-quarter results today and raised its fourth-quarter guidance, buoyed by strong performance of the companys firewall/VPN products.

Revenues for the third quarter were $129.3 million, up 22 percent on the same period last year. Earnings per share were 27 cents, up 17 percent on third quarter of 2003, and above the 25 cents per share predicted by analysts. However, the third-quarter earnings figure excludes charges related to the acquisition of security vendor Zone Labs Inc. last year (see Check Point Buys Zone Labs).

The market responded positively to the results. In afternoon trading today, Check Point shares rose $2.96 (16.52%) to $20.88.

Speaking on a conference call this morning, Check Point president Gil Shwed explained that the traditional summer-spending slowdown had not been as bad as anticipated. “We were expecting a little bit more seasonality than what happened,” he said.

As a result, Check Point’s firewall/VPN products generated up to $5 million more than anticipated, he added.The Redwood City, Calif.-based firm has talked a little trash -- saying it had some big wins in Europe against Juniper Networks Inc.'s (Nasdaq: JNPR) NetScreen product line, according to executives on the call. However, the execs refused to name the companies involved. Microsoft Corp. (Nasdaq: MSFT) has also given Check Point a leg up in the firewall market, they added.

Jerry Ungerman, Check Point’s president, says that a number of customers are adding firewalls from third-party vendors to Service Pack 2, a security upgrade to Windows XP launched by the software giant during the summer.

Check Point execs also gave some insight into the company’s product roadmap today. A new version of Check Point’s InterSpect internal security gateway will be released within a month, they said. A souped-up version of the Connectra Web security appliance will also be unveiled by the end of the fourth quarter.

Check Point raised its fourth-quarter revenue guidance to between $136 and $144 million. Earnings per share are expected to be between 28 and 29 cents.

— James Rogers, Site Editor, Next-gen Data Center Forum0