Thursday, April 25, 2013

Checkpoint releases Q1 earnings

Checkpoint released Q1 earnings Monday, beating net profit expectations, but falling short on revenue. They reported EPS of 79 cents; representing 6.8% growth from the year ago quarter, and a penny higher than analyst estimates. Revenue increased 3.1% yea rover year to $322.7 million, although analysts were looking for about $328 million. Guidance for Q2 left analyst expectations on the high end of their guided range. For revenue the company expects between $320 - $350 million, analysts were expecting $346.5 million. The street is expecting EPS of 83 cents which landed in the high end of managements 76-84 cents guidance.  Revenue seems to be an issue for the Software industry in general, with many companies performing far worse than Checkpoint in regards to revenue. Checkpoint is transitioning from deriving growth from products to growing from subscription revenues. One reason for the decrease in software spending could be companies getting their FY budgets set late in the quarter which pushed some bookings out to the next quarter. Overall, Checkpoint posted solid performance in a market that performed unexceptionally in Q1. Checkpoint has been trading in a range around $45, which is still above our stop loss of $43. The stock will be monitored closely in regards to our stop loss; however, we maintain our price target of $67.
-Ryan Ranado
Technology Sector Head

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