Check Point Q2 down from 2001, blames weak economy

Check Point Software Technologies Ltd. posted second-quarter financial results that were down across the board compared to the second quarter of 2001 due to a weak global economy, according to company officials.

Despite the Israeli security software maker's numbers being down, Check Point met Wall Street expectations for both revenue and earnings per share.

For the quarter, which ended June 30, Check Point tallied US$108.6 million in revenue, down from $142.1 million in the same quarter 2001. That figure was in line with the $108 million forecast by the 17 analysts polled by Thomson Financial/First Call.

The company earned $64.7 million for the quarter, down $86.8 million in the second quarter last year. Second quarter earnings translate to $0.26 per share, a penny higher than the $0.25 per share estimate given by 33 analysts to Thomson Financial/First Call. Both numbers were down from the second quarter of 2001, however, when Check Point earned $0.33 per share.

Check Point ended the quarter with $1.18 billion in cash and investments, up from the $1.03 billion in hand at the beginning of the year. The company spent $7.4 million in research and development for the quarter, down from $9.0 million spent in the same area in the second quarter 2001.

The decline in year-over-year figures was due to "macroeconomic conditions and IT spending ... not (improving)" at the rate the company expected them to, said Jerry Ungerman, president of Check Point, on a conference call held Monday morning.

Though the economy is still weak, the company expects that it will meet its projected figures for the rest of the year, with earnings per share dipping slightly to $0.25 in the third quarter and rising to $0.27 per share in the fourth quarter, according to Gil Shwed, the company's chairman and chief executive officer.

Ungerman and Shwed also touted Check Point's forthcoming SmartDefense product, which is set to ship in a few weeks. SmartDefense is a subscription-based service that will include a security intelligence service, as well as real-time threat information designed to more quickly give administrators tools to fight worms, viruses and other attacks.

Markets reacted well to the news, sending Check Point's stock (CHKP) up to $14.75 in off-hours trading, according to trading firm The Island ECN Inc. Check Point's stock had closed trading on Friday at $13.86, down 1 percent.

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