McAfee profit tops Street forecasts

By Gabriel Madway

SAN FRANCISCO (Reuters) - Security software maker McAfee Inc (MFE.N) reported slightly higher-than-expected quarterly profit and forecast revenue for the current quarter above Wall Street's expectations, as viruses and malicious programs increasingly flood the market.

Sales of security software -- applications that guard computers and servers against bad software and viruses -- were holding up well in the economic downturn, as a proliferation of dangerous applications tempered expectations for reductions in corporate spending, executives said.

The company forecast earnings, excluding special items, for the March quarter of 46 cents to 50 cents a share on revenue of $440 to $460 million. Analysts had been estimating a profit of 49 cents a share on revenue of $426 million.

McAfee's shares climbed almost 3 percent after hours.

"It was one of the better quarters we've seen," said Pacific Crest analyst Rob Owens. "They continue to take share in the marketplace."

McAfee said it will continue to cut costs and find efficiencies in the wake of last year's purchase of Secure Computing, the company's biggest-ever acquisition at $465 million.

But it currently expects its net headcount to remain flat through 2009.

The No. 2 maker of security software said it has imposed a hiring freeze, instituted mandatory time-off, frozen salaries, and is consolidating facilities.