Security Dynamics stock jumps
The security software maker's stock spikes 12 percent after it reports record revenues for the first quarter.
The stock closed at 29-1/16, up 3-3/16 for the day.
Security Dynamics, which bought encryption company RSA Security Data last April 15 for $200 million in stock, yesterday reported record revenues of $26.4 million for the first three months of 1997.
First-quarter revenue jumped 78 percent from $14.9 million for 1996's first quarter. Net income was $4.7 million, or 13 cents per share, compared to $2.2 million or 6 cents per share for the same period last year.
The results were within the range expected by Wall Street analysts, as reported by First Call, a firm that collects analysts' estimates. Eleven analysts expected the company to report earnings of 11 to 13 cents.
"People lump this company in with the firewall vendors, [but] it's in a much more defensible, competitive position than any given firewall vendor," said Jamie Kiggan, managing director at Cowen & Company, who expects revenues to increase 65 to 75 percent in each quarter this year. "In many of their markets, they are the only player."
An analyst who declined to be identified said Security Dynamics trades in sympathy with remote access and networking like US Robotics and Shiva, which have been down recently.
The company said heightened security concerns among companies using the Internet, intranets, and remote access fueled interest in Security Dynamics' SecurID cards and RSA's widely used cryptographic tools.
"Both businesses [Security Dynamics and RSA] continue to have real strong momentum in orders and shipments," said CFO Art Coviello, adding that the company is expanding its channels of distribution with new resellers including CompuServe and Sprint.
During the quarter, the company also announced its enterprise security strategy, a PC encryption product targeted at laptop users, and an agreement with smart card manufacturer GemPlus to add smart cards to its current offerings in secure tokens.