Check Point Net Surges

The security software company beats on the bottom line.
Author:
Publish date:

Updated from 11:41 a.m. EDT

Shares of

Check Point Software

(CHKP) - Get Report

were up sharply Tuesday after the company announced stronger-than-expected second-quarter sales and earnings and raised EPS guidance for the rest of the year.

The stock was recently up $1.73, or 8%, to $23.35 -- a five-month high.

The Israel-based network security company earned $78 million, or 31 cents a share, in the June quarter, compared with $63.3 million, or 24 cents a share, a year ago, an increase of 23%. Backing out a charge, the company earned 32 cents a share, beating the Thomson First Call consensus estimate by 2 cents a share. Revenue jumped by 14% to $144.6 million, $300,000 better than expected.

Check Point's product and license revenue were $71.2 million in the quarter compared with $67.9 million a year ago. Software subscription revenue was $58.9 million compared with $48.7 million.

In an interview, Vice Chairman Jerry Ungerman said the spending environment "remains very challenging" and sales cycles are long. " Even so, companies are spending their security budgets and prices are firm, he said. Indeed, operating margins increased to 58% from 54% in the same quarter last year.

Check Point's forecast for the third quarter -- revenue of $140 million to $150 million and earnings per share of 30 cents to 33 cents, excluding related acquisition charges -- was in line with Wall Street's expectations.

It raised its full-year EPS estimate to $1.23 to $1.28, excluding charges, from a previous forecast of $1.18 to $1.24.

Check Point sells a variety of network security products, including corporate firewalls, in competition with

Cisco Systems

(CSCO) - Get Report

and

Juniper Networks

(JNPR) - Get Report

, among others.