Acquisitions Weigh On Check Point's Q1 Profit
In its 1Q earnings call Thursday, Check Point reported GAAP net income of $46.9 million, compared to $61.6 million in the first quarter of 2006. The vendor earned 21 cents per share, down from 25 cents during Q1 2006.
The vendor attributed the shortfall to a $17 million charge related to R&D from its acquisition of Sweden-based security firm Protect Data, parent company of mobile encryption firm Pointsec, and a $5.4 million charge from its purchase of IPS vendor NFR Security. Both deals closed late last year.
Excluding charges and expenses, Check Point earned $78.6 million during the quarter, up 5 percent from the $75.1 million it earned during the first quarter of 2006. Non-GAAP earnings per share came in at 35 cents compared to 31 cents in 1Q 2006.
Revenue during the quarter was $164 million, up 23 percent from the $133.6 million in brought in during 1Q 2006. Of this, network security software sales brought in $146.5 million, up 10 percent from 1Q 2006. Data security added $17.5 million in revenue during the quarter.
Deferred revenue was $238.4 million, a jump of 17 percent from deferred revenue at the end of 2006, and up 33 percent from the end of March 2006.
"Early evidence of the success of our extended unified security architecture is reflected in the growth we experienced this quarter across our network security and data security businesses," Gil Shwed, CEO at Check Point, said in a statement.
During the quarter, Check Point completed the integration of IPS vendor NFR Security, which has been rolled into the IPS-1 product line.
"IPS-1 is now part of Check Point's product family and unified security architecture," said Eyal Desheh, CFO and executive vice president, during the call.
Check Point's cash flow from dropped 6.6 million from 1Q 2006 to $110 million, and the vendor's cash and investments balance stood at $1.12 billion as of the end of March.