(Adds Q3 forecast, CEO comments)
By Tova Cohen
TEL AVIV, July 20 (Reuters) - Network security provider Check Point Software Technologies reported a better than expected increase in second-quarter net profit on growing demand for software subscriptions to stop fast-evolving new threats.
Israel-based Check Point on Thursday forecast earnings per share (EPS) excluding one-time items of $1.18 to $1.28 in the third quarter on revenue of $430 million-$465 million. Analysts on average were estimating EPS of $1.28 on revenue of $463 million, according to Thomson Reuters I/B/E/S.
The company’s quarterly revenue forecast was reduced by $15 million because of the timing of the Jewish holiday of Yom Kippur, which falls on Sept. 30, the last day of the quarter, Chief Executive Gil Shwed told reporters. This translates into about 3-4 cents less for adjusted EPS.
Shwed said most of the company’s sales are done at the end of the quarter but Check Point’s Israel offices, like the country’s entire business sector, will be closed for Yom Kippur and for much of the day before.
Check Point is trying to reduce this effect by encouraging customers to book their orders earlier, he said.
Check Point maintained its full-year forecast from January calling for adjusted EPS of $5.05-$5.25 on revenue of $1.85 billion-$1.9 billion.
Israel’s biggest technology company by market value earned $1.26 per diluted share excluding one-time items in the second quarter, up from $1.09 a year earlier. Revenue grew 8 percent to $459 million. It was forecast to earn $1.22 a share on revenue of $455 million.
Shwed said there was some “softness” in high-end deals while subscriptions for software rose 27 percent to $118 million in the quarter.
“The major attacks that occurred during the last few months have demonstrated the need for a different approach to cyber security,” Shwed said. “We believe focusing on prevention, sharing real-time attack information and consolidation of the security infrastructure can stop the next attack.”
He noted that most customers still use fragmented protection from multiple vendors.
In April Check Point launched Infinity, a unified platform for network, cloud and mobile security, which it says not only identifies threats but also keeps them out.
More than 93 percent of companies do not use advanced protection capabilities and only about 1 percent protect their mobile devices, Shwed said. (Editing by Susan Thomas)