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Symantec Reports Solid Second Quarter Results

  • 25 October, 2007 10:56

<p>Improved business operations contribute to better than expected revenue performance</p>
<p>CUPERTINO, Calif. – Oct. 24, 2007 – Symantec Corp. (Nasdaq: SYMC) today reported the results of its second quarter of fiscal year 2008, ended Sept. 28, 2007. GAAP revenue for the quarter was $1.42 billion and non-GAAP revenue was $1.44 billion. Non-GAAP revenue, including revenue from the Altiris acquisition, grew 13 percent over the comparable period a year ago.</p>
<p>GAAP deferred revenue at the end of the September 2007 quarter was $2.60 billion, compared to $2.33 billion at the end of the September 2006 quarter. Non-GAAP deferred revenue at the end of the quarter reached $2.62 billion, up 12 percent compared to $2.35 billion at the end of the September 2006 quarter.</p>
<p>Cash flow from operating activities for the September 2007 quarter was $331 million, up 20 percent compared to $277 million for the September 2006 quarter.</p>
<p>GAAP Results: GAAP net income for the September 2007 quarter was $50 million, compared to $126 million in the September 2006 quarter. Diluted earnings per share of $0.06 compared to earnings per share of $0.13 for the same quarter last year. The earnings per share result includes a write-down of $87 million associated with non-strategic Data Center Management assets.</p>
<p>Non-GAAP Results: Non-GAAP net income for the September 2007 quarter was $263 million, compared to $261 million for the same quarter last year. Non-GAAP diluted earnings per share were $0.29, up 11 percent compared to diluted earnings per share of $0.26 for the same quarter last year. For a detailed reconciliation of our GAAP to non-GAAP results, please refer to the condensed consolidated financial statements below.</p>
<p>“With strong demand for a number of our emerging enterprise technology solutions and improving business operations, our team delivered a solid quarter,” said John W. Thompson, chairman and chief executive officer, Symantec. “Core business areas like our consumer business and our Windows-based backup solutions had strong results, which contributed to healthy cash flow performance this quarter.”</p>
<p>Financial Highlights
For the quarter, Symantec’s Consumer segment represented 30 percent of total non-GAAP revenue and grew 10 percent year-over-year. The Security and Data Management segment represented 30 percent of total revenue and grew 7 percent year-over-year. The Data Center Management segment represented 28 percent of total revenue and grew 7 percent year-over-year. Services represented 6 percent of total revenue and grew 30 percent year-over-year. The Altiris segment includes revenues from the acquisition of Altiris and Symantec’s Ghost, pcAnywhere and LiveState Delivery solutions, and represented 6 percent of total revenue.</p>
<p>International revenues represented 51 percent of total non-GAAP revenue in the September 2007 quarter and grew 15 percent year-over-year. The Europe, Middle East and Africa region represented 32 percent of total revenue for the quarter and grew 20 percent year-over-year. The Asia Pacific/Japan revenue for the quarter represented 14 percent of total revenue and grew 9 percent year-over-year. The Americas, including the United States, Latin America and Canada, represented 54 percent of total revenue and increased 10 percent year-over-year.</p>
<p>December Quarter 2007 Guidance</p>
<p>For the December 2007 quarter, GAAP revenue is estimated between $1.41 billion and $1.45 billion. GAAP diluted earnings per share are estimated between $0.06 and $0.11.</p>
<p>Non-GAAP revenue for the December 2007 quarter is estimated between $1.425 billion and $1.465 billion. Non-GAAP diluted earnings per share are estimated between $0.25 and $0.30.</p>
<p>GAAP deferred revenue is expected to be in the range of $2.635 billion and $2.785 billion. Non-GAAP deferred revenue is expected to be in the range of $2.65 billion and $2.80 billion.</p>
<p>For the December 2007 quarter, we expect cash flow from operating activities to be below the December 2006 quarter cash flow from operating activities of $454 million.</p>
<p>Quarterly Highlights</p>
<p>· Symantec signed 302 contracts worldwide versus 292 contracts in the same period a year ago worth more than $300,000 each. Sixty-four contracts were worth more than $1 million each versus 67 contracts in the same period a year ago. In the September 2007 quarter, more than 75 percent of our large deals were multiple product deals.</p>
<p>· In North America, Symantec signed new or extended agreements with customers including East Tennessee State University, a regional public university serving more than 13,000 students; US Airways, the fifth largest domestic airline employing more than 36,000 aviation professionals worldwide; Texas Children’s Hospital, an internationally recognized full-care pediatric hospital located in the Texas Medical Center in Houston; Pittsburgh Public Schools, serving 29,447 students in 65 schools; GCI, which provides residential and business telecommunications services to residents of Alaska; and The California Department of Transportation, managing more than 45,000 freeway miles and more within the state of California.
· International customers from the quarter included Contax S.A., a leading Brazilian provider of telephone, e-mail, postal, and Internet contact services; Pearson, an international media company with world-leading businesses in education, business information and consumer publishing; GS Home Shopping, the leader in Korea's home shopping industry; AMS, the Swedish National Labor Market Administration; AC Hotels, the Spanish hotel chain; and The London Stock Exchange.</p>
<p>Conference Call</p>
<p>Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss the fiscal second quarter, ended Sept. 28, 2007, and to review guidance. Interested parties may access the conference call on the Internet at <http:> . To listen to the live call, please go to the Web site at least 15 minutes early to register, download, and install any necessary audio software. A replay and script of our officers’ remarks will be available on the investor relations’ home page shortly after the call is completed.</http:></p>
<p>About Symantec</p>
<p>Symantec is a global leader in infrastructure software, enabling businesses and consumers to have confidence in a connected world. The company helps customers protect their infrastructure, information and interactions by delivering software and services that address risks to security, availability, compliance and performance. Headquartered in Cupertino, Calif., Symantec has operations in 40 countries. More information is available at .</p>
<p>NOTE TO EDITORS: If you would like additional information on Symantec Corporation and its products, please visit the Symantec News Room at . All prices noted are in U.S. dollars and are valid only in the United States.</p>
<p>Symantec and the Symantec Logo are trademarks or registered trademarks of Symantec Corporation or its affiliates in the U.S. and other countries. Other names may be trademarks of their respective owners.</p>
<p>FORWARD-LOOKING STATEMENTS: This press release contains statements regarding our financial and business results, which may be considered forward-looking within the meaning of the U.S. federal securities laws, including statements relating to projections of future revenue, earnings per share, deferred revenue and cash flow from operations, as well as projections of amortization of acquisition-related intangibles and stock-based compensation. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied in this press release. Such risk factors include those related to: maintaining customer and partner relationships; the anticipated growth of certain market segments, particularly with regard to security and storage; the competitive environment in the software industry; changes to operating systems and product strategy by vendors of operating systems; fluctuations in currency exchange rates; the timing and market acceptance of new product releases and upgrades; the successful development of new products and integration of acquired businesses, and the degree to which these products and businesses gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. Additional information concerning these and other risk factors is contained in the Risk Factors section of our Form 10-K for the year ended March 30, 2007.</p>
<p>USE OF NON-GAAP FINANCIAL INFORMATION: Our results of operations have undergone significant change due to a series of acquisitions, the impact of SFAS 123(R) and other corporate events. To help our readers understand our past financial performance and our future results, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Our non-GAAP results are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Investors are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which is attached to our quarterly earnings release and which can be found, along with other financial information, on the investor relations page of our Web site at</p>
<p>Media Contacts:</p>
<p>Debbie Sassine
+61 2 8879 1110</p>
<p>Rachel York
Max Australia
+61 2 9954 3492</p>

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