Symantec Profit Falls; Shares Tumble on Outlook
Symantec, the maker of Norton security software, reported better-than- expected quarterly results on Wednesday, but its shares slumped more than 12 percent on a muted forecast for
the current quarter.
"We decided we would pull back what appeared to be growing bullishness" over Symantec's earnings, Chief Executive John Thompson told Reuters. "This was a great quarter, but we are cautious about our own business."
Thompson said the caution stemmed in part from concerns about spending on its products in the United States as consumers, worried about the housing and credit crisis, hold off on purchases. He added that Symantec is on track to meet its June forecast of earnings of $1.10 per share to $1.15 per share for the fiscal year.
"People don't feel they have as much disposable income," Thompson said. "The choice to buy another software product or add to the PC they have will be somewhat limited."
Symantec, based in Cupertino, California, forecast third- quarter earnings before items of 25 cents to 30 cents per share on revenue of $1.41 billion to $1.45 billion.
Analysts, on average, were expecting third-quarter earnings before items of 31 cents per share on revenue of $1.47 billion, according to Reuters Estimates.
In the second quarter ended Sept. 28, net income fell to $50.4 million, or 6 cents per share, from $126.2 million, or 13 cents per share, a year earlier, as the company recorded an $87 million write-down related to a unit outside its main business.
Second-quarter revenue rose to $1.42 billion from $1.26 billion. Profit, excluding some costs, was 29 cents per share. Analysts, on average, expected 26 cents per share on revenue of $1.39 billion, according to Reuters Estimates.
"Symantec continues to be a company which is going through a recovery story," said Daniel Ives, an analyst with Friedman Billings Ramsey & Co, who has an "outperform" rating on the shares. "It's a business model that is in transition."
Symantec shares dropped $2.57 to $18.45 in extended trading after closing up 6 cents at $21.02 on Nasdaq. They are little changed this year.