uarterly reports from Check Point Software and Fortinet on Monday pointed to a strong earnings season for computer security companies, while an acquisition by Raytheon signaled more potential deal making ahead. Cybersecurity companies are seeing double-digit growth rates at a time when overall IT spending is expected to grow just 3% to 4%, said FBR Capital Markets analyst Daniel Ives.
That was seen in Monday’s results, which kick off a string of reports for the hot industry group.
Barracuda (NYSE:CUDA) reports April 27, Vasco Data Security (NASDAQ:VDSI) April 28, FireEye April 30, Qualys (NASDAQ:QLYS) May 4, and CyberArk (NASDAQ:CYBR) May 7.
Sunnyvale, Calif.-based Fortinet (NASDAQ:FTNT) said Q1 billings of $254 million, up 36% year-over-year, were the highest since it became a public company more than five years ago.
While earnings fell 27% to 8 cents a share, they beat analyst forecasts by 2 cents, and revenue jumped 26% to $212 million, topping forecasts of $205 million.
Fortinet sees Q2 revenue of $224 million to $228 million, above recent forecasts, and EPS ex items of 8-9 cents, below views. Shares rallied 8% late, after closing up 2.7%.
Check Point’s (NASDAQ:CHKP) Q1 earnings climbed 14% to 95 cents a share, exceeding Wall Street views by 4 cents. Revenue rose 9% to $372 million, edging above the consensus estimate of $370 million.
Key Areas Of Focus
The Tel Aviv, Israel-based network security vendor sees EPS ex items of 90-99 cents on revenue of $380 million to $400 million. Analysts forecast earnings of 94 cents a share on revenue of $392 million.
Check Point shares finished up 5%, hitting a 14-year high.
“On the technology front, we are putting strong focus on two key areas: mobility and threat prevention,” Chairman and CEO Gil Shwed said in a conference call with analysts.
He cited acquisitions of Lacoon Mobile Security, which specializes in securing mobile devices, and Hyperwise, which has developed a central processing unit-level threat prevention engine that stops threats, as strategies to boost product and service capabilities.
Check Point also announced a collaboration with FireEye (NASDAQ:FEYE) to share threat intelligence in a move aimed at protecting customers from increasingly sophisticated attacks.
Meanwhile, top names in the industry gathered at the high-profile RSA Conference in San Francisco.
Defense contracting giant Raytheon (NYSE:RTN) was among the first to make a splash at the event with an announcement that it will spend about $1.7 billion to acquire control of cybersecurity firm Websense to leverage skills it has honed for the U.S. military and intelligence agencies.
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