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Check Point tops estimates as hack attacks fuel demand

Check Point Software (Nasdaq: CHKP), which makes Internet security software, topped consensus estimates by a nickel a share Wednesday with first quarter earnings of $34.8 million, or 40 cents a share, on sales of $78 million.

The results for the quarter ending March 31 were well above year-ago totals. In the first quarter a year ago, Check Point reported earnings of $19.7 million, or 24 cents a share, on sales of $43.7 million.

The results account for a 2-for-1 stock split, effective Jan. 31.

Check Point shares have been on a tear in the last six months (chart) courtesy of a series of high profile hack attacks on major Web sites.

The hack attack bad news in the first quarter turned out to be good news for Check Point sales.

Gil Shwed, CEO of Check Point, said demand was strong across all of its products and geographies. The company launched a series of new products and said it will expand into new markets.

On a conference call, Shwed said he expects the company to post a 45 to 50 percent rise in earnings per share this year and more than a 50 percent increase in sales.

"We plan for long-term growth of 30-40 percent, which on the one hand is very agressive but if we look at what has happened is realistic, if not conservative," said Shwed.

"But as a result of this quarter we think we will have a 45-50 percent rise in EPS (for the year) and more than a 50 percent growth rate for sales," he said.

In other news, Check Point said it appointed Eyal Desheh chief financial officer. Desheh was most recently chief financial officer for Scitex Corporation Ltd., a digital imaging company.

Check Point's strong results may be a good indicator of what's to come for other Internet security firms. Other Net security firms include: RSA Security Inc. (Nasdaq: RSAS), Secure Computing Corp. (Nasdaq: SCUR), VeriSign Inc. (Nasdaq: VRSN), ISS Group Inc. (Nasdaq: ISSX), Entrust Technologies Inc. (Nasdaq: ENTU), Network Associates Inc. (Nasdaq: NETA), and Symantec Corp. (Nasdaq: SYMC).

Those aforementioned companies moved the most when the hack attacks were big news in February.

Reuters contributed to this report.