Check Point Sees 1Q Sales, Earnings Boost

The Redwood City, Calif.-based security vendor also reported first-quarter earnings of $73.7 million, a gain of 76 percent year over year.

About 28 percent of Check Point's first-quarter revenue came from new product licenses, compared with 25 percent in the 2004 fourth quarter, according to company executives. During the quarter, the vendor introduced several major products, including the Eventia security event management line, the Integrity 6.0 end-point line and the Connectra 2.0 series, which provides SSL VPN functionality as an appliance-based or a software-based product.

Check Point Vice Chairman Jerry Ungerman told financial analysts during a conference call that the company saw good growth in annuity-based revenue from its ZoneAlarm security services as well as its SmartDefense offering for enterprise customers.

"Activity level remains high, the channel is engaged and the opportunity for continued success is positive," Ungerman said.

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Gil Shwed, chairman and CEO of Check Point, said the company could do more with its channel to bolster subscription sales, especially in small and midsize accounts. For example, small-business customers typically buy ZoneAlarm direct via Check Point's Web site, he said. In the enterprise line, 100 percent of sales go through the channel.

"We are trying to build the right plan for the small-business channel," Shwed said, adding that the SMB space continues to be a long-term goal for Check Point. "It's something that we try to focus on every quarter."

In terms of geographic mix, about 44 percent of Check Point's first-quarter revenue was generated in the Americas, compared with 42 percent from Europe, the Middle East and Africa. Asia, particularly Japan and China, showed uncharacteristic weakness in the quarter, Shwed said.

Looking forward, Shwed said the company expects revenue of $142 million to $148 million in the second quarter. Check Point anticipates the quarter's earnings per share to be 29 cents to 30 cents, he added.

In late-morning trading Monday, Check Point shares were down 80 cents to $21.