Check Point Software Technologies Ltd.
(
CHKP
) reported fourth quarter 2012 with adjusted earnings of 85 cents
per share beating the Zacks Consensus Estimate of 83 cents.
Revenue
Check Point reported revenues of $368.6 million in the fourth
quarter, up 3.3% from $356.8 million in the year-ago period and
within the company's guidance range of $355.0-$387.0 million. The
year-over-year revenue growth was aided by the increase in
Software Updates, Maintenance and Services revenues, partially
offset by lower Product and Licenses revenue.
Geographic contributions also remained stable with Americas
contributing 45% of revenues; Europe 37%; and Asia-Pacific and
Japan, Middle East and Africa region contributing the remaining
18%.
Operating Results
Reported gross profit increased 5.9% year over year to $324.1
million. Gross margin increased 210 basis points from the
year-ago quarter to 87.9%. Cost control measures primarily led to
the margin expansion.
Operating income came in at $210.5 million, up 9.3% year over
year. Operating margin increased 311 basis points year over year
to 57.1%. Total operating expenses increased 0.2% year over year
as the company continued to invest in business and hiring for
research and development, sales and marketing and technological
support.
Reported net income was $173.9 million or 85 cents per share,
up from $159.8 million or 75 cents in the comparable quarter last
year. Excluding special items but including stock-based
compensation expense, non-GAAP net income was $173.9 million or
85 cents a share compared with $160.7 million or 79 cents in the
year-earlier quarter.
Balance Sheet & Cash Flow
Check Point exited the quarter with cash, cash equivalents and
marketable securities of approximately $1.50 billion, up from
$1.45 billion in the prior quarter. Trade receivables were $373.8
million. Cash flow from operations was $202.5 million, up from
$180.4 million in the previous quarter.
First Quarter Outlook
Management forecasts first quarter2013 revenue in a range of
in the range of $320 million to $332 million, while the non-GAAP
earnings per share in the range of 74 to 80 cents per share. GAAP
earnings per share are expected to be approximately 6 cents less
than the estimated range.
For 2013, the company expects revenue in the range of $1.4
billion to $1.45 billion while the non-GAAP earnings per share in
the range of $3.30 to $3.50. Moreover, the GAAP EPS is expected
to be approximately $0.26 less than that.
Our Take
Check Point delivered good fourth quarter results with the
bottom line exceeding the Zacks Consensus Estimate. Results were
also decent in terms of year-over-year comps. The company
delivered a decent operating performance with a modest revenue
growth and a maximum revenue contribution from America. Results
are affected to a certain extent by the slowdown in growth in the
European region and spending by the company as well as fresh
competition from
Palo Alto Networks Inc.
(
PANW
) in the new target markets of Check Point.
The company is also deriving some benefits from strength at
the high end of the market and increased demand for its blade
solutions. We think that Check Point offers a good investment
opportunity in comparison to
Cisco Systems Inc.
(
CSCO
) and
Juniper Networks Inc.
(
JNPR
).
Currently, Check Point has a Zacks Rank #3 (Hold).
CHECK PT SOFTW (CHKP): Free Stock Analysis
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CISCO SYSTEMS (CSCO): Free Stock Analysis
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JUNIPER NETWRKS (JNPR): Free Stock Analysis
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PALO ALTO NETWK (PANW): Free Stock Analysis
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