Leading firewall and virtual private network vendor Check Point Software Technologies on Thursday said that its first-quarter 2002 revenue would come in between $US104 million and $105 million, with earnings per share of $0.24 to $0.25, missing the company's projections and analyst expectations.
The 35 analysts polled by Thomson Financial/First Call had expected Check Point to tally $0.29 per share for the first quarter. Check Point will announce its full results for the quarter on April 23 after the market closes.
The company blamed its weak sales at the end of the quarter on the economy. Many customers are postponing purchases as "part of a general conservative spending environment . . . in a still uncertain economy", said Gil Shwed, chairman and CEO of Check Point, at a press conference early on Thursday.
Check Point's projected numbers for the quarter, which ended March 31, are down from the $120 million in revenue the company had expected, Shwed said, adding that revenue projections for the rest of the year would be down at least 10 per cent per quarter from previous expectations.
Despite an expected boom in security spending after September 11, Check Point has not experienced that growth, according to Eyal Desheh, Check Point's chief financial officer. Instead, customers are either postponing their purchases or spreading them out over the year, he said, at the press conference.
"We don't sense that the customers are not interested in security, but we do sense that the customers are much more conservative in how they spend," he said.
Other security companies are reporting similar weakness, with RSA Security reporting earlier in the week that it would lose between $14 million and $16 million for the first quarter.
The company did have some positive news, however, touting strong sales of appliances targeted at small and medium businesses. Despite the down figures projected for 2002, 2003 looks fine, Desheh said.
"The need for security, the need for VPNs (virtual private networks), is rising," he said.
Shwed also said that the violence in Israel is not having any direct impact on the company. Check Point is based in Israel, though it has a number of offices in the US.