Internet security services provider Check Point Software Technologies Ltd. (CHKP) Thursday reported an increase in net profit for the third quarter, benefited mainly by higher revenues. On a per share basis, adjusted earnings grew year-on-year and beat Street estimates by three cents.
For the quarter, the Redwood City, California-based company's net earnings were $91.46 million, or $0.43 per share, higher than net income of 80.06 million or $0.37 per share reported in the previous-year period. Check Point noted that the quarter's results included amortization of intangible assets with regard to Nokia security business acquisition, amounting to $5.4 million or $0.03 per share.
On an adjusted basis, net income rose to $109.49 million or $0.52 per share from $94.25 million or $0.44 per share in the same quarter last year. Adjusted results for the period exclude one-time restructuring costs of $67 thousand and amortization charges totaling $14.30 million as against $8.89 million in the year-ago period.
On an average, 18 analysts polled by Thomson Reuters expected the company to earn $0.49 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter increased 17% to $233.64 million from $199.72 million in the third quarter of fiscal 2008. Analysts expected Check Point to generate revenues of $230.67 million during the quarter.
Revenues from products and licenses were $86.88 million as against $81.93 million, and revenues from software updates, maintenance and services surged to $146.76 million from $117.80 million a year ago.
Commenting on the results, chairman and chief executive officer Gil Shwed stated that, operationally, the company performed well across all regions, with Asia Pacific having a particularly good quarter.
"We also continued to realize further synergies from our recent acquisition, which helped us to achieve these results and deliver non-GAAP operating margin of 55%," added Shwed.
During the quarter, research and development expenses incurred by Check Point were $22.43 million, slightly lower than $23.19 million incurred in the corresponding period last year, while selling and marketing costs increased to $56.38 million from $50.80 million in the 2008-year period.
Shwed added, "We continued to realize good traction from our latest product introductions, including the new SMART-1 management appliances, the high-end Power-1 11000 series and low-end UTM-1 130 appliances. Our Software Blade Architecture experienced excellent adoption by our customers--."
As of September 30, 2009, the company had deferred revenues of $360.1 million, up 32% from $272.9 million in fiscal 2008. Check Point had repurchased 1.8 million shares at a total cost of $50 million during the quarter.
For the preceding second quarter, the company had reported a net income of $75.60 million as against $79.17 million in the year-ago quarter. On a per share basis, earnings were $0.36, flat with the previous year. The company's total revenues were reported to be up 12% to $223.64 million from $199.61 million in the second quarter of fiscal 2008.
For the nine-month period, the company's net profit was $247.99 million or $1.17 per share as against $237.49 million or $1.09 per share in the comparable period prior year. Adjusted net income increased to $305.84 million or $1.44 per share from $280.32 million or $1.29 per share last year. Year-to-date, total revenues were $652.29 million compared with $590.92 million in the year-ago period.
CHKP closed Wednesday's regular trading at $30.10 per share on the Nasdaq.
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