Check Point Software raises 2021 estimates after Q3 beat

·2 min read
The logo of network security provider Check Point Software Technologies Ltd is seen at their headquarters in Tel Aviv, Israel

By Steven Scheer

JERUSALEM (Reuters) -Check Point Software Technologies beat estimates with a slight gain in third-quarter net profit and raised its 2021 estimates amid rapid growth in its consolidated cyber security platform and cloud protection products. Israel-based Check Point on Thursday said it earned $1.65 per diluted share excluding one-off items in the three-months ending Sept. 30, up from $1.64 a year earlier. Revenue grew 5% to $534 million. It was forecast to earn $1.60 a share on revenue of $530 million, according to I/B/E/S data from Refinitiv. Third-quarter growth was driven by a 172% gain in its Infinity platform that consolidates network, mobile and cloud protection. It also posted double-digit sales increases in its Harmony and CloudGuard lines. "Companies are realizing that they need a more modern architecture ... that consolidation makes sense and in many cases their existing solutions don't work together well enough and are not especially effective," Chief Executive Gil Shwed told a news conference. Check Point's Nasdaq-listed shares opened 2.4% higher at $120.95. They are down 11% so far in 2021 after a 20% rise last year. Shwed said large scale cyberattacks are rising, pointing to recent attacks against SolarWinds, Codecov, Colonial Pipeline and Kesaya. He said 95% of attacks start with e-mail but conventional products don't always work with cloud-based e-mail systems. In August it bought cloud e-mail security firm Avanan. "We keep looking for acquisitions. We want to grow more," Shwed said, adding the company has $3.8 billion left in cash. The company said with annual results back-end loaded, it expects a strong fourth quarter, with revenue of $560-$605 million and adjusted EPS of $2.02-$2.22.

For all of 2021, it projects revenue of $2.13-$2.72 billion and adjusted EPS of $6.81-$7.01. It had forecast revenue of $2.08-$2.18 billion and adjusted EPS of $6.45-$6.85, compared with 2020 results of $2.07 billion and $6.78 respectively.

Check Point said it bought back 2.64 million shares in the quarter, worth $325 million, as part of its share repurchase programme. The company said it is expanding the programme by another $2 billion and would continue to buy up to $325 million of its own shares each quarter.

(Reporting by Steven Scheer; Editing by David Goodman and Mike Harrison)

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