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Cyber security firm Check Point keeps 2023 outlook after Q1 beat

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Gil Shwed, Chief Executive of Network security provider Check Point Software Technologies, speaks during the annual Cyberweek conference at Tel Aviv University, Israel, June 20, 2016. REUTERS/Amir Cohen/File Photo

JERUSALEM, May 1 (Reuters) - Check Point Software Technologies (CHKP.O) announced on Monday higher than anticipated first-quarter earnings on increased demand for its products in the face of growing cyber assaults, and retained its projection for the whole year.

The Israeli-based business noted excellent growth throughout the first three months of the year from its unified cyber security platform that blocks assaults across networks, mobile and the cloud.

It reaffirmed its 2023 sales forecast of $2.34-$2.51 billion and profits per share excluding one-time items of $7.70-$8.30 - vs analysts' projections of revenue of $2.43 billion and adjusted EPS of $7.98. Revenue in 2022 reached $2.33 billion.

Its Nasdaq-listed shares slid 5.2% at $120.80 in early trade on the forecast as some in the market were anticipating a more bullish outlook.

Chief executive Gil Shwed noted that in the midst of a "challenging" market that started in November, demand for security remained strong due to the increasing frequency and complexity of cyber assaults.

He noted that some clients were not rushing to renew products and start new projects but despite this, "we managed to win many other projects" and develop cloud operations and subscriptions.

Check Point's security subscription revenue climbed 13% to $228 million. Its consolidated Infinity platform grew 140% in the quarter. In February, it unveiled a new artificial intelligence-based threat prevention tool.

"The renewal rates we have and recurring business are very healthy," Shwed told an analysts call before noting he was worried about tighter expenditure across the marketplace.

For the second quarter, Check Point projected revenue of $570-$605 million and adjusted EPS of $1.85-$1.95. Analysts had projected EPS of $1.88 on sales of $596 million.

Check Point said it earned $1.80 per diluted share excluding one-off items in the January-March quarter, up 15% from $1.57 a year earlier. Revenue climbed 4% to $566 million.

It was anticipated to earn $1.74 a share on sales of $569 million, according to I/B/E/S data from Refinitiv.

Shwed highlighted that with $3.6 billion in cash, the corporation was ready to take advantage of the industry's consolidation.

Check Point said it bought back 2.6 million shares in the quarter, worth $325 million, as part of its continuing $2 billion share buyback plan.

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