(Adds forecast, CEO comments, share reaction)
By Tova Cohen
TEL AVIV, Jan 31 (Reuters) - Network security provider Check Point Software Technologies blamed a reorganisation of its salesforce in the United States after quarterly revenue fell just short of estimates.
Check Point earned $1.58 per diluted share excluding one-time items in the fourth quarter, up from $1.46 a year earlier. Revenue grew 4 percent to $506 million, Israel’s largest technology company said on Wednesday.
It was forecast to earn $1.50 a share on revenue of $508.6 million, according to Thomson Reuters I/B/E/S.
Check Point’s shares were down 2 percent at $102.27 in early Nasdaq trading. The United States is Check Point’s biggest market, accounting for 40 percent of revenue.
“We made a lot of changes in our sales organisation in the U.S. and U.S. results are not where we want them to be,” Chief Executive Officer Gil Shwed told a news conference.
“We have more work to do and it will take a few quarters until we see the results from the U.S. organisational changes.”
On a conference call with analysts he said he did not believe the weakness was due to increased competition from rival companies such as Palo Alto Networks.
Some of the changes were made to help the company market its new product, Infinity Total Protection, a unified platform for network, cloud and mobile security.
“Our industry is at an inflection point where cyber attacks are becoming increasingly more sophisticated and security infrastructure needs to significantly advance to effectively combat these threats,” Shwed said.
Infinity is sold on an annual subscription basis rather than as a product. Check Point has been gradually moving more of its revenue to subscriptions, which now account for 70 percent of revenue, but these subscriptions boost deferred revenue at the expense of current revenue.
Check Point forecast 2018 earnings per share (EPS) excluding one-time items of $5.50-$5.90 on revenue of $1.9-$2.0 billion. Analysts on average were estimating EPS of $5.72 on revenue of $1.97 billion, according to Thomson Reuters I/B/E/S.
The company attributed the wide range to uncertainty regarding how many clients would move over to Infinity.
For the first quarter Check Point forecast revenue of $440-$460 million and adjusted EPS of $1.25-$1.30. Analysts estimate revenue of $462 million and adjusted EPS of $1.32. (Additional reporting by Steven Scheer; Editing by Keith Weir)