TEL AVIV (Reuters) - Network security provider Check Point Software Technologies reported a better-than-expected second quarter net profit and doubled its overall share repurchase program on Wednesday to $2 billion.
Chief Executive Gil Shwed said an annual survey conducted by the company showed that most of its shareholders preferred a share buyback to a dividend, noting that with $4 billion in cash the company could buy back shares and do acquisitions.
The Israel-based company also maintained its full-year outlook and forecast third-quarter revenue of $454 million-$474 million and earnings per share excluding one-time items of $1.30-$1.40. That was in line with analysts’ revenue estimate of $464 million and adjusted EPS of $1.35, according to Thomson Reuters I/B/E/S.
Check Point’s board authorized expanding its ongoing share repurchase plan by 30 percent quarterly, up to $325 million, and the overall program by 100 percent to $2 billion in total.
The company has repurchased $7.3 billion worth of shares since 2003. The updated plan expands the existing plan from last August that provided for buying back up to $1 billion and is expected to be completed in the third quarter of 2018.
“This is the right investment for shareholders,” Shwed told reporters.
The company’s shares were up 3.6 percent at $115 in early Nasdaq trade.
Check Point earned $1.37 per diluted share excluding one-time items in the second quarter, up from $1.26 a year earlier. Revenue grew 2 percent to $468 million.
It was forecast to earn $1.30 a share on revenue of $461.6 million, according to Thomson Reuters I/B/E/S.
“We had growth in all our territories, especially in the U.S. and Europe,” Shwed said.
Nevertheless, he said Check Point can perform better.
The company has been moving more of its revenue to subscriptions, which now account for about 70 percent of revenue, but these subscriptions boost deferred revenue at the expense of current revenue.
Despite beating expectations, Shwed said the company does not update its annual forecast quarterly and was therefore maintaining its outlook from last quarter, which predicts adjusted EPS of $5.45-$5.75 on revenue of $1.85-$1.93 billion.
Reporting by Tova Cohen; Editing by Ari Rabinovitch and Susan Fenton