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Check Point blames weak economy for fall in figures

Check Point Software Technologies has posted second-quarter financial results that were down compared to the second quarter of 2001 because of the weak global economy, according to company officials.

However, Check Point met Wall Street expectations for both revenue and earnings per share.

For the quarter, which ended 30 June, Check Point tallied $108.6m (£69.4m) in revenue, down from $142.1m in the same quarter 2001. That figure was in line with the $108m forecast by the 17 analysts polled by Thomson Financial/First Call.

The company earned $64.7m (£41.4m) for the quarter, down $86.8m in the second quarter last year. Second quarter earnings translate to 26 cents per share, a penny higher than the 25 cents per share estimate given by 33 analysts to Thomson Financial/First Call. Both numbers were down from the second quarter of 2001, however, when Check Point earned 33 cents per share.

Check Point ended the quarter with $1.18bn (£755m) in cash and investments, up from the $1.03bn in hand at the beginning of the year. The company spent $7.4m (£4.7m) in research and development for the quarter, down from $9m spent in the same area in the second quarter of 2001.

The decline in year-on-year figures was a result of "macroeconomic conditions and IT spending... not [improving]" at the rate the company expected them to, said Jerry Ungerman, president of Check Point.

Though the economy is still weak, the company expects that it will meet its projected figures for the rest of the year, with earnings per share dipping slightly to 25 cents in the third quarter and rising to 27 cents per share in the fourth quarter, according to Gil Shwed, the company's chairman and chief executive officer.

Ungerman and Shwed also touted Check Point's forthcoming SmartDefense product, which is set to ship in a few weeks. SmartDefense is a subscription-based service that will include a security intelligence service, as well as real-time threat information designed to more quickly give administrators tools to fight worms, viruses and other attacks.

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