Symantec Beats Street, Goes On Shopping Spree

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Security vendor Symantec went on an Internet security shopping spree Wednesday as it posted first-quarter results that easily surpassed Wall Street expectations.

Symantec, based here, bought Riptech, a managed security provider in Alexandria, Va., for $145 million; Recourse Technologies, a Redwood City, Calif.-based intrusion-detection vendor for $135 million; and SecurityFocus, a San Mateo, Calif.-based provider of threat and vulnerability data, for $75 million.

John Thompson, Symantec's chairman and CEO, said in a conference call that the acquisitions create "a new leader in Internet security" and underscore Symantec's intent to lead changes occurring in the security industry, which he described as "still an immature segment."

The acquisition of Riptech, which has more than 500 customers, will boost Symantec's managed security business, he said. The purchase of Recourse will provide the vendor with gigabit-speed, network-based intrusion-detection technology, he said.

"This technology will help us leapfrog competitors in network-based intrusion detection," Thompson said.

And with the acquisition of SecurityFocus, "Symantec will offer the most comprehensive security alerting service," he said.

Symantec said it will continue to manage the SecurityFocus Bugtraq online mailing list of vulnerabilities.

Thompson said integration plans are under way but noted that the acquisitions are subject to customary regulatory approvals.

For its first fiscal quarter, Symantec reported a pro forma net income of $65.6 million on $316 million in revenue, excluding one-time charges and amortization of acquisition-related intangible assets. That compares with a net income of $33.9 million on $228 million in revenue for the same quarter a year ago.

First-quarter pro forma earnings of 41 cents per share beat First Call/Thomson Financial consensus estimates of 32 cents.

"By just about any measure, the performance this quarter exceeded our wildest expectations," Thompson said.

First-quarter results were driven by strong performance in all geographic regions, 90 percent growth in the company's consumer business and accelerated growth in its enterprise market, he said.

Symantec also recently acquired Mountain Wave, a provider of security management software and services, for $20 million in cash.

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