Check Point Shares Slide After Poor Report

The stock drops 20% after the software company says it will show weaker-than-expected earnings and revenue.
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Shares of

Check Point Software Technologies

(CHKP) - Get Report

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)

and integration firm

Vitria

(VITR)

.

Combined with

SonicWall's

(SNWL)

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)

down 92 cents, or 4.2%, to $21.27.

Symantec

(SYMC) - Get Report

dropped $2.20, or 5.6%, to $37.17,

Network Associates

(NET) - Get Report

lost 65 cents, or 2.8%, to $22.55, and

VeriSign

(VRSN) - Get Report

was down $1.71, or 6.6%, to $24.06 in recent trading.