Ahead of the Bell: Check Point Software downgraded

Check Point Software Technologies Ltd. is seeing its core Internet security business weaken faster than expected, a Deutsche Bank analyst said, downgrading shares to "Hold" from "Buy."

In a note to clients late Monday, analyst Todd Raker said tight cost controls helped deliver a solid first quarter for the Israeli company. But he said Check Point's forecast suggests its "core business is slowing more rapidly than we anticipated."

Raker said the company's stock is increasingly at risk from the impact of the recession and competition.

Check Point on Monday reported first-quarter adjusted earnings above Wall Street forecasts. Sales climbed 2 percent to $195 million.

In a conference call with analysts, the company projected second-quarter adjusted earnings of 41 cents to 49 cents per share on sales of $205 million to $230 million. Analysts project income of 45 cents per share on sales of $216 million, according to a Thomson Reuters poll.

Raker said the outlook suggests the core security business is in line to range between a drop of 3 percent and a gain of 5 percent year-over-year, "slower than we had thought."

For the full year, Check Point said it expects profit of $1.85 to $1.95 per share and $860 million and $920 million in revenue. Analysts expect profit of $1.88 and $876 million in revenue.