Check Point Software Technologies Ltd. (CHKP) beat quarterly profit expectations in the first quarter propelled by the growing need for security networks and remote solution systems as more people work from home during the coronavirus pandemic.
Check Point said on Monday adjusted earnings per share rose to $1.42 in the first quarter, up from $1.32 a year earlier, and above the $1.38 forecast. Total revenue increased 3% to $486 million, beating estimates of $480.4 million. Shares were up 5.4% at $110 in pre-market trading in the U.S.
“Despite the COVID-19 pandemic, we sustained elevated business activity levels and delivered results in the upper half of our guidance with strength coming from the Americas,” said Gil Shwed, Founder and CEO of Check Point. “We saw an increased demand for network security gateways in order to support higher capacities and expand the use of our remote access VPN solutions.”
Shwed added that although the software company navigated through the recent challenges smoothly, “it’s hard to predict what effect this changing environment will have on the future”.
Check Point disclosed that its research group identified a “dramatic” increase in coronavirus-related cyber attacks. On average, over 14,000 coronavirus-related malicious attacks occur each day with a peak of a daily 20,000 reached in April. Since January 2020, 68,000 coronavirus-related domain names were registered and the group identified malicious domains at double the rate of others.
As of March 31, the software company had $3,990 million in cash balances, marketable securities and short-term deposits compared to $3,949 million as of December 31. Cash flow from operations amounted to $359 million down from $379 million in the first quarter of 2019. Year-over-year, currency-hedging transactions had a $20 million impact on the company’s cash flow from operations.
Overall, Wall Street analysts are sidelined on the stock as 10 say Hold, 5 say Buy and 2 say Sell adding up to a Hold consensus rating. The $111 average price target implies the shares could advance 6.4% in the coming 12 months. (See Check Point stock analysis on TipRanks).
During the first three months of the year, Check Point repurchased about 3 million shares at a total cost of about $325 million, it said.
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