Expected to earn $2.11 per share, pro forma, on sales of $555.4 million in its fiscal Q4, Check Point reported Wednesday morning that it had earned $2.17 per share pro forma on sales of $563.8 million.
Quarterly sales grew 4% at Check Point. Pro forma profits grew 7%, and earnings as calculated according to generally accepted accounting principles (GAAP) grew 6%, coming in below the pro forma number at $1.95 per share.
Similarly for the year, sales ended up 4% higher in 2020 than in 2019 -- $2.1 billion. Profits actually grew a bit faster for the year as a whole, however (indicating that things slowed down toward year-end -- one possible reason investors might be upset). Pro forma profits for the year increased 11%, and GAAP profits grew 10% -- $5.96 per share.
Check Point CEO Gil Shwed pronounced himself pleased with the results, but investors -- less so.
Guidance may be another part of the problem. Consistent with the apparent deceleration in business growth in Q4, Check Point is guiding investors to expect somewhere between $1.45 and $1.55 per share in profits in Q1 2021. Taken at the midpoint, that appears to fall short of analysts' consensus $1.51 per-share forecast. This is curious, because Check Point is actually predicting sales will come in stronger than Wall Street has forecast -- between $485 million and $550 million, ahead of consensus projections for $502 million.
Worse, for the year as a whole, Check Point predicts earnings between $6.45 and $6.85. The entirety of that range falls shy of analysts' hoped-for $6.92 in fiscal 2021 earnings. Again, Check Point sees sales exceeding expectations for $2.1 billion this year, predicting it will actually see between $2.2 billion and $2.8 billion in business.
For a change, though, investors seem to be ignoring the good news on sales, instead punishing Check Point for not earning enough profit on those sales.