Stock Watch: Solid Q3 Sends Check Point Higher

Check Point Software Technologies Ltd. (Nasdaq: CHKP) edged up 15/16 to 147 7/8 early Wednesday after reporting higher revenue and earnings for the third quarter.

The Redwood City, California-based company, which makes security software for business-to-business e-commerce, said revenue for the quarter rose to $116 million from $57.8 million in the same period last year. Net income, meanwhile, rose to $61.6 million, or 35 cents per fully diluted share, from $24.7 million, or 15 cents.

Analysts had expected the company to earn 26 cents per share.

“The third quarter was an exceptional one for Check Point,” said chairman and chief executive officer Gil Shwed. “We experienced stronger than anticipated demand, as sales from all regions and channels, especially the service provider channel, were robust during the quarter.”

The company had cash and cash equivalents of $542.6 million at the end of the quarter, up $78.3 million.

Check Point earlier this month announced a partnership with circuit-maker Broadcom Corp. aimed at helping businesses conduct secure transactions over the Internet. The two companies will develop and sell virtual private network (VPN) and firewall-acceleration products, with the first due out next month, and work on security systems for high-capacity broadband connections.

The companies said the new products will “allow network managers to secure increasingly high volumes of network traffic generated by the growth of e-business environments.”

Published reports said the company has a similar alliance with chipmaker giant Intel Corp.

Check Point shares closed at a 52-week high of 171 on October 3rd, the day the Broadcom alliance was announced. A year ago, the shares traded at 20 1/4.

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