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Symantec lowers earnings report after software glitch

Symantec lowers earnings report after software glitch

Symantec has lowered its reported revenue for the first quarter of fiscal 2005 by US$20 million after discovering that it had incorrectly configured an internally developed accounting tool, the company announced Monday.

The error, which involved software used to calculate deferred subscription revenue from Symantec's international retail business, was discovered on Aug. 3, said John Thompson, Symantec's chairman and chief executive officer, in a conference call.

The bug caused Symantec to recognize revenue incorrectly over a period of two years, although it is adjusting its revenue only for the quarter in which the error was discovered, Thompson said. The error had no effect on Symantec's cash position, making the adjustment in keeping with generally accepted accounting practices, he said.

The US$20 million will now be recognized as deferred revenue over the next year, Thompson said.

In July, Symantec reported first-quarter revenue of US$577 million and net income of US$131 million, or US$0.37 per share. Those numbers will be revised to US$557 million in revenue and net income of US$117 million, or US$0.33 per share, the company said.

Symantec's accounting tool had been configured to record international sales as if they were in U.S. dollars, Thompson said. A sale of Euro 19.95, for example, would have been counted as US$19.95.

"Were it not for the divergence between the U.S. dollar and the Euro, we probably would have never caught it," he said. "At the time we implemented the tool, the ratio between the European currency and the U.S. dollar was almost one to one."

Symantec intends to include the adjusted numbers in its 10-Q regulatory filing with the U.S. Securities and Exchange Commission Tuesday, Thompson said.


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