July 31 (Bloomberg) -- Symantec Corp., the biggest maker of security software, reported fiscal first-quarter profit that exceeded analysts’ estimates as the company reduced costs to cope with a record slump in personal-computer sales.
Profit before certain items in the period that ended June 28 was 44 cents a share, while sales rose 2.5 percent to $1.71 billion, the company said yesterday in a statement. Analysts on average had projected profit of 36 cents and sales of $1.64 billion, according to data compiled by Bloomberg. The shares surged to the highest price since 2005.
Chief Executive Officer Steve Bennett has cut jobs and consolidated sales functions as shrinking PC shipments drag down demand for Symantec’s antivirus software. His efforts to lower expenses, along with a push to sell more server-management programs to corporations, have helped cushion the blow, and the company reiterated an earlier forecast for annual revenue.
“You have to give them an A-plus in light of what they’ve done in this PC environment,” said Daniel Ives, an analyst at FBR Capital Markets & Co., who has the equivalent of a neutral rating on the stock.
Symantec shares climbed 9 percent to $26.55 at 9:44 a.m. in New York, and earlier touched $26.58 for the highest intraday price since January 2005. Through yesterday, the stock had gained 85 percent since Bennett was appointed as CEO in July 2012 after Symantec’s board ousted Enrique Salem.
Net income in the first quarter was little changed at $157 million, or 22 cents a share, compared with $160 million, or 22 cents, a year earlier, Mountain View, California-based Symantec said. Revenue in last year’s fiscal first quarter was $1.67 billion.
Sales in the company’s division that includes Norton antivirus products fell less than 1 percent to $732 million, or 43 percent of total revenue. Sales in the unit that includes data backup rose 4 percent to $641 million, contributing 38 percent of Symantec’s sales. The company’s corporate-security technology business saw sales growth of 7 percent to $336 million, or 20 percent of the total.
Most of Symantec’s revenue now comes from businesses, helping counter weakness in consumer demand for PCs and related software, Bennett said in a telephone interview.
“The team continues to execute very, very well,” he said.
Profit in the second quarter, which ends in September, will be 42 cents to 44 cents a share, Symantec said in the statement. Revenue will be $1.65 billion to $1.69 billion. That compares with average analysts’ predictions of 45 cents in profit on $1.71 billion in sales.
For fiscal 2014, which ends in March, Symantec said sales are still forecast to be unchanged to up 2 percent from the prior year, indicating revenue of $6.91 billion to $7.04 billion. Analysts had estimated sales of $6.97 billion.
Worldwide PC shipments have dropped for five consecutive quarters, the longest streak on record, as consumers increasingly turn to tablets and smartphones for getting online, Gartner Inc. said earlier this month.
In January, a person familiar with Symantec’s plans said Bennett planned to eliminate 1,000 jobs, or about 5 percent of the staff, in an effort to bolster profit.
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