NEW YORK ( TheStreet) -- Competition in the enterprise security market has become fierce. While Check Point Software (CHKP - Get Report) has a respectable track record that shows it understands the growing needs of its customers, the company is finding it challenging to stave off rivals such as Cisco (CSCO - Get Report) and Fortinet (FTNT - Get Report), which are gunning for its business. Going into its Q3 report, investors wanted to see that Check Point provided enough "oomph" to help them feel more secure about its prospects.
Breach In Growth Momentum
For its third quarter, Check Point earned $152.4 million, or 73 cents per share on revenue of $332.4 million. While the revenue total arrived slightly below estimates of $333 million, it did show 8% year over year from $308.3 million. Likewise, net income of $152.4 million was 14% higher from the same period of a year ago. The company attributed the improved results to growing demand for its Internet security software. Check Point's chairman and CEO, Gil Shwed offered this:
Third quarter results continued to be good with healthy growth in enterprise appliance units and software blade sales. Our revenues and earnings per share came in at the upper half of our projections. Geographically, North America continued to deliver great results with double digit growth in product and service revenues.
The numbers were impressive. However, this was not enough to prevent a selloff in the stock immediately after the company issued guidance for the fourth quarter. Investors were displeased with the revenue range of $355 million to $387 million. On average, analysts projected $382 million. Similarly, the low end of Check Point's adjusted earnings projections of 84 cents was significantly below analysts' expectations of 90 cents per share. As a result, the stock plummeted almost 13%.
Concerns regarding Europe have a lot to do with the company's conservative guidance. This seems to be consistent with rival Fortinet, which cut full-year projections just the day prior due to weak demand in China and Europe - sending shares down almost 20%.