BREAKING NEWS

BREAKING NEWS

Check Point profit tops estimates, buys cloud security firm

Now Reading :

Check Point profit tops estimates, buys cloud security firm

Check Point profit tops estimates, buys cloud security firm
@ Copyright :
Baz Ratner(Reuters)
Text size Aa Aa

By Tova Cohen

TEL AVIV (Reuters) - Network security provider Check Point Software Technologies <CHKP.O> reported quarterly net profit that beat expectations and acquired Israel's Dome9 to strengthen its cloud security position but its fourth quarter outlook sent shares falling.

gi

Chief Executive Gil Shwed said on Wednesday the acquisition will reduce fourth quarter adjusted earnings by 2-4 cents a share.

For the fourth quarter, Israel-based Check Point forecast adjusted earnings per share of $1.56-$1.67 on revenue of $520 million-$528 million. Analysts on average estimated earnings of $1.65 a share on revenue of $515 million.

The shares were down 2.9 percent at $109.86 at 1500 GMT.

"Guidance for the fourth quarter was largely in line with expectations, while we would like to have seen this accelerate more," Edward Jones analyst David Heger said in a research note.

He expects growth to rebound into 2019 as the company's sales force, which has been transitioning with the shift to a more cloud-oriented focus, reaches full productivity.

Founded in 2011, Dome9 enables security and compliance for rapid public cloud adoption.

Full financial details of the acquisition were not disclosed, but Check Point said there was a cash payment of $175 million as well as other components.

"They are going on the offensive with this cloud strategy," Daniel Ives, managing director of equity research at Wedbush Securities, told Reuters. "This is another great poker move by Check Point with cloud front and centre."

Ives rates the shares a "buy".

Check Point earned $1.38 per diluted share excluding one-time items in the third quarter, up from $1.30 a year earlier. Revenue grew 4 percent to $471 million.

It was forecast to earn $1.36 a share on revenue of $466 million, according to I/B/E/S data from Refinitiv.

"Third quarter results reached the top end of our projections, with better than anticipated strength coming from the U.S. and Europe," Shwed said.

The company maintained its full year estimate for EPS excluding items of $5.45-$5.75 and revenue of $1.85-$1.93 billion.

Dome9 has raised a little over $25 million from investors including Japan's Softbank <9984.T>. It has just over 100 workers and annual sales of several million dollars.

"Dome9 is not just a feature for us. It is a platform for everything we will do," Shwed told a news conference.

(Reporting by Tova Cohen and Ari Rabinovitch; Editing by Adrian Croft and Alexandra Hudson)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.