October 23, 2014 / 2:23 PM / 3 years ago

Check Point third-quarter profit beats estimates, raises 2014 forecast

A woman walks past the Check Point Software Technologies Ltd. logo at the company's offices in Tel Aviv August 15, 2011. REUTERS/ Nir Elias

TEL AVIV (Reuters) - Network security provider Check Point Software Technologies reported quarterly profit that topped expectations and raised its full-year forecast on strong demand for its threat prevention and other software subscriptions.

Check Point earned 93 cents a share excluding one-time items

in the third quarter, up from 85 cents a year earlier. Revenue

grew 8 percent to $370.4 million, the Israeli-based company said on Thursday.

Check Point, a leader in the corporate fight against cyber crime and computer viruses, was forecast to have earned 91 cents a share on revenue of $367.1 million, according to Thomson Reuters I/B/E/S.

“Cyber security demand has become a top priority in today’s IT landscape and Check Point is at the right place at the right time to benefit from these trends,” said FBR Capital Markets managing director Daniel Ives, who rates Check Point “outperform”.

“While tech stalwarts such as IBM, Oracle, SAP, and EMC are seeing IT spending headwinds, pure play security vendors such as Check Point are seeing the benefits of a shifting landscape ... towards next generation cyber security platforms.”

Check Point’s shares were up 3.9 percent to $70 in pre-market Nasdaq trading.

Revenue from its software blades - modular software building blocks bought on an annual subscription basis - was especially strong, with growth of 22 percent.

“There is still demand for security around the world and this is the main reason for our growth,” Chief Executive Officer Gil Shwed told a news conference, noting the biggest driver was the company’s threat prevention blade.

This is in line with a trend in the industry as cyber security providers focus on detecting and preventing attacks before they penetrate organizations rather than just protecting gateways as in the past.

“There are more attacks; they are more violent and more sophisticated,” Shwed said.

He forecast fourth-quarter revenue of $395 million to $430 million and earnings per share excluding one-time items of 99 cents to $1.09. Analysts on average estimated revenue of $410 million and EPS of $1.03.

Shwed also raised his full-year forecast to revenue of $1.47-$1.505 billion from a previous estimate of $1.45-$1.5 billion, and adjusted EPS of $3.64-$3.74 from $3.50-$3.70.

Check Point, which has nearly $3.7 billion in cash, is seeking to use some of its funds for mergers and acquisitions.

The company also expects to benefit from a strengthening dollar against the shekel, if the trend continues.

Reporting by Tova Cohen; Editing by Steven Scheer

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