Renewals boost Check Point Software 4Q net income
Check Point Software Technologies Ltd.'s net income rose 9 percent in the fourth quarter, as it generated more revenue from existing customers.
But the data security company, which is based in Tel Aviv, Israel, and trades on the Nasdaq, on posted results that fell short of Wall Street's expectations and shares slipped in morning trading.
Check Point's net income in the three months ended Dec. 31 rose to $174 million, or 85 cents per share, from $160 million, or 75 cents per share in the same period a year earlier.
A decrease in new sales of products and licenses was more than offset by higher revenue from software updates, maintenance and subscriptions — products generally marketed to existing customers.
The company preserved its profit margin in part by cutting total operating expenses by 4 percent.
Total revenue rose a modest 3 percent, to $368.6 million from $356.8 million in the fourth quarter of 2011.
Analysts surveyed by FactSet had expected, on average, earnings of 88 cents per share on revenue of $373.8 million.
For the full year 2012, Check Point generated net income of $620 million, or $2.96 per share, on revenue of $1.34 billion.
During the fourth quarter, the company said, it repurchased 3.6 million shares at a total cost of $160.1 million.
Check Point offers hardware and software used to help companies secure data traveling between the public internet and private networks. It sells its products through distributors, partners, resellers and managed service providers.
Check Point shares fell 60 cents to $47.39 in morning trading, after starting the session down more than 4 percent. The stock has changed hands between $40.60 and $65 in the past 52 weeks.