Symantec Raises Full-Year Earnings Forecast After Blue Coatby
Shares soar in extended trading in first report by new CEO
Blue Coat helps boost Symantec’s position in network security
Symantec Corp. raised its forecast for full-year sales and profit, boosted by the acquisition of Blue Coat Systems Inc., new products and a focus on security technologies.
One of the pioneers of the computer security industry, Symantec is moving away from its longtime core business of antivirus software, a market that has declined as personal computer sales have slumped, and toward developing protections against targeted attacks such as those offered by rivals FireEye Inc. and Palo Alto Networks Inc. Symantec has unparalleled scale -- its software is installed on 175 million consumer and corporate computers. The company acquired Blue Coat for $4.65 billion, giving Symantec a strong position in network security and a new chief executive officer in Greg Clark.
“Everything seemed to be wrong at Symantec and with one stroke of the pen everything seemed to turn right,” Steve Ashley, an analyst at Robert W. Baird & Co., said before Thursday’s earnings announcement. “Really the sentiment has flipped around and rightfully so. It’s going to take a long time to play out, but clearly the story has gone from unhealthy to recovery.”
Adjusted per share profit in fiscal 2017 will be $1.08 to $1.14, the company said in a statement Thursday, compared with a previous estimate of as much as $1.10. Revenue will be $4.04 billion to $4.12 billion, up from as much as $3.58 billion initially forecast.
For the current quarter sales are projected to be be $960 million to $990 million, and profit is seen at 18 cents to 21 cents a share per share, the Mountain View, California-based company said. The stock rose as much as 5.6 percent in trading after U.S. markets closed.
Symantec reported profit, excluding certain items, of 29 cents per share in the fiscal first quarter, which ended July 1. Analysts estimated 25 cents. Sales declined 3 percent to $884 million compared with the analysts’ estimate of $877.4 million.
Net income increased 15 percent to $135 million, or 22 cents a share.
The revenue figure is lower than the year-earlier period because last year Symantec hadn’t yet completed the $7.4 billion sale of its Veritas data-storage division to Carlyle Group LP, a transaction that was completed in January. The sale has helped Symantec focus exclusively on cybersecurity, a shift seen further in the acquisition of Blue Coat Systems. As part of the deal, Blue Coat’s Clark was appointed CEO of Symantec, a move that pleased many analysts and investors because it promised to give Symantec some much-needed stability. Clark is Symantec’s fourth CEO in as many years.
“Symantec is now positioned to take advantage of the vast market opportunities in helping customers embrace the cloud, protecting the mobile workforce and securing enterprises, governments and consumers from advanced attacks,” Clark said in the statement.
Symantec has been through several rounds of job cuts in recent years as the company reduced costs in response to declines in its main businesses. In May, Symantec announced that it was cutting 10 percent of its staff. At the time, Symantec had more than 11,000 employees.