CIBC Downgrades Check Point

Analyst Shaul Eyal also cut his 2006 and 2007 EPS forecasts

CIBC World Markets downgraded Check Point Software Technologies (CHKP) to sector perform from sector outperform, after the company on Monday pre-announced disappointing earnings guidance.

Analyst Shaul Eyal says the pre-announcement fell short of his 34 cents earnings per share (EPS,) $149.5 million revenue estimates, and former guidance of 33 cents to 34 cents EPS and $145 million to $155 million revenue. Also, notwithstanding the termination of the SourceFire acquisition, he notes that the company cut 2006 guidance to EPS of between $1.37 and $1.45 on $580 million to $610 million revenue. This was down from $661 million, which included the potential $40 million contribution from SourceFire. He says the only positive news was deferred revenue grew by $10 million sequentially to $179 million. He cut his $1.44 2006 EPS estimate to $1.37 and his $1.54 2007 EPS estimate to $1.46.

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