Symantec Reports Flat Quarter On Continued Storage Weakness

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Symantec on Wednesday reported flat revenue but strong earnings growth in during its first fiscal quarter of 2011, as weakness in its storage business acted as a drag on strong security sales.

In Symantec's fiscal first quarter ended July 2, the company reported revenue of $1.433 billion, which was essentially unchanged from the $1.432 billion it reported in last year's Q1.

Symantec reported net income of $161 million, or 20 cents per share, for the first quarter of 2011 compared with income of $74 million, or 9 cents per share, for the same quarter last year.

The company's license revenue of $185 million in the first quarter of 2011 was down 17 percent from the $223 million it reported last year, while content, subscription, and maintenance revenue rose 3 percent to $1.25 billion.

Symantec's consumer revenue rose 6 percent over last year to $473 million, and its security and compliance revenue rose 1 percent to $340 million. Its services revenue remained unchanged with last year at $96 million.

Revenue for Symantec's largest business segment, storage and server management, fell 5 percent year-over-year to $524 million. Allan Krans, senior analyst with Technology Business Research, said in a research report that this is the sixth quarter in a row where Symantec's storage revenue has fallen on a quarter-to-quarter basis.

"Symantec’s Storage and Server Management business continues to reel from the recession, extending the streak of consecutive quarters with a year-to-year decline to six, with [second quarter of calendar 2010] revenue in the segment representing a 21.2% decline compared with 2Q08," Krans wrote in the report.

The fall in storage management revenue comes as a result of a number of large enterprise deal which slipped from the first quarter to the second quarter, said Enrique Salem, president and CEO of Symantec.

However, Salem said those deals were not lost to competitors. Instead, he said, customers have slowed down their purchasing decisions.

Next: Some Parts Of Storage Business Doing Well

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