Check Point Jumps on Second-Quarter Earnings, Share Buyback

Check Point Software Technologies Ltd., the world’s second-largest security networks maker, surged the most in six months in New York as second-quarter sales met estimates and after announcing a share buyback.

Check Point gained 7.5 percent to $49.06 at 1:30 p.m. in New York, leading gains in the Bloomberg Israel-US Equity Index of the most-traded Israeli companies in the U.S. Shares of the Tel Aviv-based company slumped 22 percent in the second quarter, the worst three-month performance since 2004.

The company, which reported earnings of 71 cents per share, plans to increase share repurchases by as much as $1 billion over the next two years, according to a statement today. Second-quarter revenue increased 9.3 percent to $328.7 million, about 1 percent shy of the $331.8 million mean estimate of 25 analysts surveyed by Bloomberg. Mounting concern a global economic slowdown will reduce the technology company’s revenue sent shares lower prior to the earnings report, FBR Capital Markets said.

“Sentiment going into earnings on this name had been Armageddon-like,” Daniel Ives, an analyst at FBR, said by phone from New York today. “They come through with numbers in line with expectations, which is much better than feared given the bear chatter. The share buyback is cherry on top of the sundae.”

Check Point, which had about 204.8 million shares of common stock outstanding as of June 30, has repurchased $2.2 billion of shares since 2003, the company said in today’s statement. The security networks-maker had $3.2 billion of cash and equivalents as of June 30, data compiled by Bloomberg show.

“It’s just a way of enhancing shareholder value by deploying their cash to benefit shareholders,” Ives said.

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