Check Point cuts costs, boosts profits in Q3

Leading firewall and security vendor Check Point Software Technologies Ltd. Thursday announced profits of US$74.3 million for the third quarter of 2001, citing decreased costs and strong uptake of new products as driving the results.

The $74.3 million figure, which translates to $0.29 per share, was up from the $61.6 million, or $0.23 per share, Check Point tallied in the third quarter of 2000. The earnings-per-share number also slightly topped the consensus estimate of $0.285 per share the 31 analysts polled by the Web site had set for the company.

Revenues for the quarter were $118 million, up from $116 million in 2000. Check Point also said that it has $944.2 million in cash and investments.

Despite the difficult economic times, Check Point posted good numbers because "security is a very, very important market," according to Check Point president Jerry Ungerman.

"Security is going to stay up there for a long time" and being a leader in the market, as Check Point is, can only help, he said.

"There is no doubt that (security) is affected" by the economy, but "on a relative basis, the security companies are doing much better than other segments," he added.

During the quarter, Check Point began shipping its Check Point NG product, the next generation of the company's security software; introduced Provider-1 NG, a software package targeted at carriers that allows them to manage multiple firewalls from a single console; and expanded the feature set of its OPSEC (Open Platform for Security) security framework.

The company also said that the Sept. 11 terrorist attacks accounted for an estimated loss of between $15 million and $20 million for the quarter. The attacks delayed by about ten days sales that would otherwise have been made immediately, Ungerman said.

Though many security companies have credited the attacks for boosting interest in their business, Ungerman said that the attacks have had no immediate impact on customer interest in Check Point.

"For the last couple years, (security) has been at the top of the list," he said, noting that the attacks "just add another concern, one more issue" to spur companies to action.

And security is going to be a long-term issue, he said.

"Security is going to continue for the next few years to be at the top of the list," because as more business moves online and becomes dependent on networking, security will grow in importance, he said.

With its software, hardware partnerships and cash, Check Point is "very well positioned" for that future, Ungerman said.

"We're going to do very well, if not better, than anybody," he said.