(Adds details, Q4 outlook, analyst comments, share reaction)
By Steven Scheer
TEL AVIV, Oct 28 (Reuters) - Network security provider Check Point Software Technologies reported quarterly net profit that beat expectations, boosted by higher security subscriptions, and indicated the firm was on track to reach revenue of about $2 billion in 2019.
Israel-based Check Point said on Monday it earned $1.44 per diluted share excluding one-time items in the third quarter, up from $1.38 a year earlier. Revenue grew 4% to $491 million, with deferred revenue up 8% to $1.24 billion.
It was forecast to earn $1.40 a share on revenue of $491 million, according to I/B/E/S data from Refinitiv. Analysts cited better cost controls for the higher than expected EPS.
Chief Executive Gil Shwed said the quarterly results were driven by 13% growth in security subscriptions and expanded customer adoption of the company's cloud products.
"This was another modest step in the right direction for Check Point, although questions remain about competition on the cloud heating up looking ahead," said Daniel Ives, managing director of equities research at Wedbush Securities.
For the fourth quarter, the company forecast adjusted earnings per share of $1.93 to $2.04 on revenue of $527 million to $557 million, in line with analysts' estimates of EPS of $1.97 and revenue of $543 million.
It reiterated a full-year 2019 outlook of revenue of $1.94 to $2.04 billion and adjusted EPS of $5.85 to $6.25.
Shwed said Check Point was still in a transformation process, moving from a traditional product business into more of an annuity model.
"We are definitely working hard to generate a higher growth rate," he told reporters, adding that after two small acquisitions in the past year he would like to see more in the future. "We would like to see high growth sooner, but it does take time."
He noted that cloud and advanced threat protection remain the company's main growth drivers.
"We place a lot of emphasis on the cloud. Our cloud business results continue to be healthy," Shwed said.
Check Point's shares were up 1.6% at $110.02 in early trading on the Nasdaq. The stock has gained 5.5% so far this year.
The company said it bought back 2.9 million shares worth $323 million as part of its share repurchase programme. (Additional reporting by Tova Cohen Editing by Paul Simao)