Check Point said earnings are expected to be 32 cents a share, on a diluted basis, for the second quarter, in line with First Call's estimate and better than the 17 cents a share earned in the second quarter of last year.
However, revenue for the second quarter is expected to be between $140 million to $142 million, better than the $90.7 million in the second quarter last year but short of First Call's estimate of $150 million.
"Given the current market environment, we really believe these numbers are strong testimony to Check Point's market strength," CEO Gil Shwed said on the company's Tuesday morning conference call.
Analysts on the call also praised the company for meeting earnings estimates. But they did have some questions about the company's new 2001 revenue estimates and its server-provider business.
On the call, Checkpoint said it expects 2001 revenue to be up 30 percent to 50 percent over last year. That leaves plenty of room for the company to miss First Call's consensus estimates of $630 million, which would imply a 48 percent gain over 2000's revenue.
Analysts questioned why the range was so big.
"A lot of our performance depends on macroeconomic environment. If conditions improve, it will result in an upsurge in revenue, but it's hard to predict," said Shwed, who said the upper end of guidance was dependent on a market improvement, while the low end would be the result if the economy remains the same. The company also has a lot of big deals, and if just a couple of them get delayed, it could significantly alter results.
Analysts also expressed concern about the company's service-provider business, which management admitted was its most drastically hit area.
While the service-provider business in Asia is still going strong, "Europe is getting softer than it was in the first and fourth quarter(s)," said President Jerry Ungerman, "though it's not as weak as the U.S."
