Internet Security Systems (ISS), which makes intrusion detection software, reported a profit for the fourth quarter on higher revenue, but the company’s stock fell after it issued an outlook short of Wall Street’s expectations.
For 2004, ISS is projecting a net profit 48-55 cents per share on revenue between $275 million and $285 million. Analysts’ forecast for 2004 was for a profit of 60 cents on revenue of $266 million.
The stock price of ISS (Nasdaq: ISSX) dropped as much as four percent in after-hours trading Wednesday, when it closed up $1.40 for the day to $19.15. It was down again more than $1, or almost 6 percent, to just over $18 in morning trading Thursday.
In the fourth quarter, ISS had net income of $4.4 million on $67.1 million in revenue, compared with a net loss of $12.1 million on $63.1 million in revenue in the fourth quarter in 2002. Earnings were 9 cents a share in the fourth quarter, compared with a loss per share of 25 cents in the fourth quarter of 2002.
For the year, Atlanta-based ISS posted net income of $19.7 million on $245.8 million in revenue, compared with net income of $1.8 million on $243.3 million in revenue in 2002. Earnings were 39 cents a share in 2003, up from earnings of 4 cents a share in 2002.
“We are delighted with our execution this quarter and enter 2004 with significant momentum,” said Tom Noonan, ISS chairman, president and CEO. “–With the acquisition of Cobion in January, ISS has added a significant component to its security convergence strategy of one unified engine that protects against all threats…setting a new standard in protection and flexibility and empowering organizations to select the type of protection that best fits their needs.”
Cobion is the German content security firm that ISS paid $32.9 million for earlier this month. The Cobion technology will be assimilated into ISS’ Proventia product family, with content security being added to Proventia M protection appliances in the second quarter of 2004.