April 24 (Bloomberg) -- Symantec Corp., a maker of computer security software, dropped the most in more than two years after saying fiscal fourth-quarter sales and profit were less than forecast, citing a drop in data-storage software contracts.
The shares of Mountain View, California-based Symantec fell 11 percent to $16.01 at the close in New York, the biggest decline since July 2009. Before today’s slide, the stock had climbed 15 percent this year.
Symantec said revenue from data storage and server management -- its biggest unit, generating about a third of sales -- fell 5 percent in the quarter that ended March 30, citing fewer large contracts than expected and more deferred revenue. The results show Symantec is struggling to expand in the storage market, which is led by larger rivals such as International Business Machines Corp. and EMC Corp.
“The license revenue shortfall in the storage and server-management business is likely to rekindle the debate about whether Symantec needs to restructure,” Steven Ashley, an analyst at Robert W. Baird & Co., wrote in a research report today.
Symantec said fiscal fourth-quarter revenue was about $1.68 billion, compared with a prior projection of $1.72 billion to $1.73 billion, the company said in a statement today. Analysts on average estimated sales of $1.73 billion, according to data compiled by Bloomberg.
Profit excluding some items was about 38 cents, down from a previous forecast of 41 cents to 42 cents, the company said. That compares with an average analyst estimate of 42 cents.
For the first quarter, which ends in June, Symantec said revenue will rise or fall about 0.5 percent from $1.65 billion a year earlier, compared with the $1.7 billion average analyst estimate. The company said profit excluding some items will decline 5 percent to 7.5 percent from the 40 cents a share reported a year earlier, while analysts had predicted 43 cents.
“Our fourth-quarter bookings exceeded our internal plans and the underlying billings activity came in line with our previous expectations,” Enrique Salem, Symantec’s chief executive officer, said on a conference call today. “However, we generated fewer license-rich deals compared to the March 2011 quarter, when we closed several particularly large contracts.”
Symantec made a big push to expand in data storage with its $10.2 billion purchase of Veritas Software Corp. in 2005. The company said it will report complete results for the fourth quarter on May 2.
To contact the editor responsible for this story: Tom Giles at email@example.com