Security vendor lowers financial forecasts

Security vendor Check Point has lowered its forecasted 2006 results and citing several reasons for the U-turn in its fortunes.

Back in January the vendor boasted a record quarter for Q4 2005. However, the firm has warned that its preliminary results for the first quarter of 2006 are anticipated to between $133m and $134m compared to $156 for Q4 2005.

Gil Shwed, chief executive of Check Point, said: "We believe that our first quarter results were impacted by three main factors: Firstly he change in our decision to acquire Sourcefire; secondly a shift in product mix toward increased longer term engagements such as software subscriptions and SmartDefense and decreased product revenues; and finally a slower growth pace in our industry. The success of our subscription and SmartDefense programmes resulted in a healthy increase in our deferred revenues and contributed to the overall business generated in the quarter.

"In light of the foregoing factors, we have reassessed our forecast for the remainder of 2006. Reflecting the current market conditions, the customer shift toward subscription contracts in the first quarter and the exclusion of approximately $40 million of Sourcefire results from our annual numbers, we expect revenues for the year to be in the range of $580 to $610m," added Shwed.