Caretower provides the latest products of Symantec
Symantec Corp. (SYMC), the world’s biggest
seller of security software, gave a forecast for fiscal first-
quarter sales and profit that was in line with analysts’ reduced
estimates amid weak spending on its data-storage products.
Profit excluding some costs in the period ending in June
will be 37 cents to 38 cents a share on sales of $1.65 billion
to $1.66 billion, the company said in a statement today.
Symantec issued a preliminary forecast on April 24, when it also
said fourth-quarter results had missed earlier projections.
Symantec, best-known for its anti-virus programs, has been
struggling to expand in the storage market, which is led by
larger rivals such as International Business Machines Corp. and
EMC Corp. The company’s push into data storage through the $10.2
billion acquisition of Veritas Software Corp. in 2005 is
increasingly being viewed as a mistake, said Daniel Ives, an
analyst at FBR Capital Markets Co. in New York.
“It continues to be a core frustration among investors,”
Ives said in an interview. “Their core DNA is on the security
side. It’s like a pizza shop that starts to make hamburgers.”
Mountain View, California-based Symantec said last week
that first-quarter profit excluding certain items would decline
5 percent to 7.5 percent from the 40 cents a share reported a
year earlier, while revenue would rise or fall about 0.5 percent
from $1.65 billion.
As a result, analysts trimmed first-quarter estimates to an
average of 38 cents a share in profit on sales of $1.66 billion,
according to data compiled by Bloomberg.
Sun Servers
Symantec shares declined less than 1 percent to $16.43 at
the close in New York. The stock has gained 5 percent this year.
Chief Executive Officer Enrique Salem said Symantec’s data-
storage business has been hurt as Sun Microsystems servers, now
made by Oracle Corp., have lost market share, which Oracle has
said is part of a strategy to focus on more profitable deals.
Symantec’s data-storage software has traditionally been sold
alongside Sun servers, Salem said.
“We didn’t close as many large site licenses this year,”
Salem said in an interview today.
In the fourth quarter, which ended March 30, sales rose
less than 1 percent to $1.68 billion, the company said today.
Net income, which included a gain from the sale of a joint
venture, more than tripled to $559 million, or 76 cents a share,
from $168 million, or 22 cents, a year earlier. Profit excluding
certain items was 38 cents.
Fourth-quarter sales in the storage and server management
division fell 5.6 percent to $591 million, while consumer sales
rose 1.8 percent to $523 million, Symantec said in the
statement.
In its preliminary report, Symantec said it expected to
report fiscal fourth-quarter revenue of about $1.68 billion,
compared with a prior projection of $1.72 billion to $1.73
billion.
To contact the reporter on this story:
Jordan Robertson in San Francisco at
jrobertson40@bloomberg.net
To contact the editor responsible for this story:
Tom Giles at
tgiles5@bloomberg.net
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