Symantec Rises as Revenue Beats Estimates: San Francisco MoverJordan Robertson and Karl Baker
Symantec Corp., the biggest maker of antivirus software, advanced to the highest price since 2008 after reporting fiscal third-quarter sales and profit that beat estimates, aided by strong demand for data-management tools.
The shares rose 3 percent to $21.49 at 2:53 p.m. in New York, and earlier touched $21.82, the highest intraday price since September 2008. Revenue for the period, which ended Dec. 28, rose 4.4 percent to $1.79 billion from the same period a year earlier, the Mountain View, California-based company said today in a statement. Analysts on average had projected sales of $1.74 billion, according to data compiled by Bloomberg.
Sales for storage and server-management, the company’s biggest business, climbed 7.8 percent to $666 million, while revenue from security tools gained 3.3 percent. Chief Executive Officer Steve Bennett is expected to outline a strategic plan after the close of markets today that may include divestitures and across-the-board cost cuts as the company works to beef up storage and security products, said Daniel Ives, an analyst at FBR Capital Markets.
“There’s a lot of anticipation about tonight with the strategic update,” Ives said in an interview. “They’re kinda playing the role of comeback kid.”
Profit excluding some items was 45 cents a share, topping analysts’ 38 cent average projection.
The company bought back $200 million of shares in the period. Symantec also named Dan Schulman as non-executive chairman, a role previously held by Bennett.
Bennett, the former CEO of Intuit Inc. was named to the top Symantec post in July after the board ousted Enrique Salem.
After losing market share in data-storage to EMC Corp. and International Business Machines Corp., Symantec has faced pressure to sell or spin off that division, said Steve Ashley, analyst at Robert W. Baird & Co. The unexpected growth in storage in the quarter now makes a divestiture less likely, he said.
“Clearly there were areas of surprise, the biggest being growth in the storage business,” Ashley said in an interview.
Instead of paring storage, Symantec may instead choose to cut costs by eliminating jobs in other areas and by streamlining administrative tasks, he said.
“I think we’re going to hear them say this is a company that has made dozens of acquisitions over time, and those acquisitions have not been on a back-office basis fully assimilated,” Ashley said.
Symantec has scheduled a Webcast for 4:30 p.m. New York time to discuss “strategic direction, operational plan, capital allocation strategy and financial results, including guidance,” the company said in the statement.
Cris Paden, a spokesman for Symantec, didn’t immediately respond to a request for comment.