Symantec Earnings Top Estimates

Symantec Chief Executive Officer John Thompson cited strong sales performance in EMEA and APJ coupled with continuing improvements in the Americas and key product areas that delivered double digit growth, including e-mail archiving, messaging, compliance and Windows-based backup solution.

Symantec reported an increase in quarterly profit, boosted by strong international sales, and forecast current-quarter results above Wall Street estimates, sending its shares up 9 percent.

The company said that net income rose to $132 million, or 15 cents per diluted share, in its fiscal third quarter, from $117 million, or 12 cents per share, a year earlier. Revenue, excluding the impact of acquisitions and the expensing of stock options, rose 15 percent to $1.53 billion in the December quarter. Excluding items, Symantec earned 33 cents per share.

For the December quarter, Symantec's Consumer division represented 29 percent of total non-GAAP revenue, which grew at a constant eight percent. The Security and Data Management segment, representing 29 percent of total revenue, grew nine percent year over year.

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The Data Center Management Segment represented 29 percent of total revenue, grew 11 percent year over year. The standalone Altiris solutions contributed a record $65 million in non-GAAP revenue.

The company also saw a 21 percent increase in international revenue, accounting for more than one-half of total revenue. North America and Latin America revenue rose 8 percent.

The earnings lead analysts to estimate that March quarter GAAP revenue will likely be between $1.50 billion and $1.54 billion, while non-GAAP revenue is estimated to be between $1.51 billion and $1.55 billion. Diluted earnings are estimated between .16 and .18 cents per share. The company also forecast fourth- quarter earnings of 33 cents to 35 cents per share.

GAAP deferred revenue is estimated to be between $2.94 billion and $3.04 billion, while non-GAAP deferred revenue is projected to be in the range of $2.95 billion and $3.05 billion.

For the full year, Symantec anticipates cash flow from operating activites to be greater than the $1.67 billion reported in 2007.

Shares of Symantec rose to $16.60 in after-hours trading after closing at $15.26, up 1.6 percent on the Nasdaq, according to a Reuters report.

Execs say that the last few quarters have set a precedent that signals a continuous upswing. "We are very well positioned to capitalize on these growth trends," said Thompson.

Products that have continued to generate revenue include Backup Exec, Enterprise Vault and Symantec Endpoint Protection, Thompson said.

"Our customers face an enormous challenge in integrating all of the components they must acquire to ensure they are appropriately managing their information assets," said Thompson. "Our board portfolio of products and services, coupled with a clear strategy for product integration, should make this task much easier for them, particularly those in the mid-market."

Thompson cited that tighter integration with Altiris with backup and systems recovery functions, as well as with Symantec Endpoint Protection, would make the process of securing and managing information much easier for customers and distinguish the company in the marketplace.

Both Thompson and Chief Operating Officer Enrique Salem noted significant organizational changes within the company throughout the year, highlighting December's closing of the Vontu acquisition, as well as the creation of new C level positions and other restructuring.

Chief Operating Officer Enrique Salem noted that sales in the Americas have shown solid progress as well, after significant changes to the enterprise sales organization. Symantec Endpoint Protection 11 has gotten off to a solid start, Salem said, with 23 million seats shipped and "some of the best reviews in the industry."

In addition, Salem Backup Exec and NetBackup 6.5, which features new disk based backup capabilities, have also both done well competitively.

Plus, the latest Norton 360, marketed toward what the company calls "digital families" comprised more than 25 percent of consumer sales. Symantec said that they hoped to launch version 2.0 by the end of March.

"It's clear to me that the most advanced PC security tool on the market is about to take another big step ahead of the competitors," said Salem.