Check Point Software Earns $1.38 per Share

We have three Buy List earnings reports today. Before the bell, Check Point Software (CHKP) reported Q3 earnings of $1.38 per share. That’s two cents above Wall Street’s estimates. Revenues were $471 million. The company told us to expect earnings between $1.30 and $1.40 per share and revenue between $454 million and $474 million.

“Third quarter results reached the top end of our projections, with better than anticipated strength coming from the US and Europe,” said Gil Shwed, Founder and CEO of Check Point Software Technologies. “Today we announced the acquisition of Dome9. This new addition to Check Point’s Infinity architecture delivers enhanced Cloud Security with advanced active policy enforcement and multi-cloud protection capabilities. The combination of Dome9 and Infinity CloudGuard product family further differentiates Check Point in the rapidly evolving Cyber Security environment,” Shwed concluded.

Here are some quarterly highlights:

Total Revenue: $471 million compared to $455 million in the third quarter of 2017, a 4 percent increase year over year. Revenues were above the midpoint of our guidance.

GAAP Operating Income: $226 million compared to $225 million in the third quarter of 2017, representing 48 percent and 49 percent of revenues in the third quarter of 2018 and 2017, respectively.

Non-GAAP Operating Income: $250 million compared to $251 million in the third quarter of 2017, representing 53 percent and 55 percent of revenues in the third quarter of 2018 and 2017, respectively.
GAAP Taxes on Income: $45 million compared to $44 million in the third quarter of 2017.

GAAP Net Income and Earnings per Diluted Share: GAAP net income was $198 million compared to $193 million in the third quarter of 2017. GAAP earnings per diluted share were $1.25 compared to $1.16 in the third quarter of 2017, a 7 percent increase year over year.

Non-GAAP Net Income and Earnings per Diluted Share: Non-GAAP net income was $219 million compared to $215 million in the third quarter of 2017. Non-GAAP earnings per diluted share were $1.38 compared to $1.30 in the third quarter of 2017, a 6 percent increase year over year.

Deferred Revenues: As of September 30, 2018, deferred revenues were $1,148 million compared to $1,036 million as of September 30, 2017, an 11 percent increase year over year.

Cash Flow: Cash flow from operations of $249 million compared to $260 million in the third quarter of 2017.

Cash Balances, Marketable Securities and Short Term Deposits: $4,072 million as of September 30, 2018, compared to $3,865 million as of September 30, 2017.

Share Repurchase Program: During the third quarter of 2018, we purchased approximately 2.6 million shares at a total cost of approximately $300 million.

Check Point also said it bought Dome9 in order to boost its position in cloud security.

On the earnings call, the company said they expect Q4 earnings of $1.56 to $1.67 per share on revenue of $500 million to $528 million. Wall Street had been expecting $1.65 per share on revenue of $515.29 million.

Previously, Check Point had given full-year guidance of $5.45 to $5.75 per share. Today’s guidance effectively narrows that range to $5.60 to $5.71 per share since CHKP has earned $4.04 per share for the first three quarters.

Posted by on October 24th, 2018 at 8:10 am


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