Check Point Shares Slide After Poor Report

Shares of Check Point Software Technologies(CHKP Quote - Cramer on CHKP - Stock Picks) slid Thursday after the firewall firm reported that first-quarter revenue and earnings would fall short of Wall Street expectations.

Shares of Check Point fell $5.50, or 20%, to $21.96 in heavy trading.

Check Point said it would earn 24 cents to 25 cents a share on revenue ranging from $104 million to $105 million in the first quarter, which ended March 31. Analysts were expecting the company to earn 29 cents a share on revenue of $122 million, according to Thomson Financial/First Call.

In the first quarter a year ago, the Ramat-Gan, Israel-based firm earned 32 cents a share on $145 million in revenue.

In a press release issued before the market opened, Check Point Chairman and CEO Gil Shwed attributed the company's weak revenue to the "continued depressed information technology spending environment."

Check Point joins a growing list of software makers who have preannounced disappointing financial results for the first quarter this week, including enterprise software firm PeopleSoft(PSFT Quote - Cramer on PSFT - Stock Picks) and integration firm Vitria(VITR Quote - Cramer on VITR - Stock Picks).

Combined with SonicWall's (SNWL Quote - Cramer on SNWL - Stock Picks) warning Thursday, Check Point's news indicates that the firewall and virtual private network business is becoming more competitive, said Ken Kiarash, an analyst at Buckingham Research Group.

The news helped push shares of Internet Security Systems(ISSX Quote - Cramer on ISSX - Stock Picks) down 92 cents, or 4.2%, to $21.27. Symantec(SYMC Quote - Cramer on SYMC - Stock Picks) dropped $2.20, or 5.6%, to $37.17, Network Associates (NET Quote - Cramer on NET - Stock Picks) lost 65 cents, or 2.8%, to $22.55, and VeriSign(VRSN Quote - Cramer on VRSN - Stock Picks) was down $1.71, or 6.6%, to $24.06 in recent trading.