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Websense's Profit Slips

But the company beats analysts' earnings expectations.

Updated from 5:06 p.m. EDT

First-quarter profit at IT security company Websense was cut in half, but the company beat analysts' expectations and guided in-line for the current quarter.

Net income fell to $3.9 million, or 9 cents a share, from $7.9 million, or 16 cents a share, in the first quarter of 2006.

Excluding expenses and acquisition related costs, the company earned $9.6 million, or 21 cents a share.

Revenue for the quarter was up about 18% to $49.7 million.

Analysts polled by Thomson First Call were expecting earnings of 20 cents a share on revenue of $49 million.

During the quarter, Websense incorporated its acquisition of private company PortAuthority Technologies into a data loss and information leak prevention product called Websense Content Protection Suite. Net billings of $42.5 million in the first quarter reflected $1 million of billings from that product.

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International revenue increased to 39% of total revenue, up from 35% from same time last year. "I think the Street is underestimating the international growth," said Websense CEO Gene Hodges in a conference call with investors. "We think there is still potential for extended growth there which should help us achieve our overall long-term growth target."

International revenue will approach almost half the company's revenue by the end of next year, said Hodges.

Websense said it plans to launch a new product in July, Websense Express, targeted at medium-sized businesses that have between 100 and 1,000 employees.

Meanwhile, the company said it is on track to exit hardware business later this year, as expected, said Hodges.

For the second quarter of fiscal 2007, the company said it expects to earn 20 cents to 22 cents a share, excluding items, on revenue of $50 million to $51 million.

Analysts were expecting earnings of 22 cents a share on revenue of $51.2 million.

Shares of Websense were down 7 cents, or 4.8%, to $24.31 in recent after-hours trading.