May 9, 2019 / 8:30 PM / 7 months ago

Symantec CEO to step down in abrupt departure as company warns on profit

(Reuters) - Symantec Corp’s chief executive officer stepped down unexpectedly on Thursday, the same day the antivirus software maker issued a profit warning, sending the shares plunging in after-hours trading.

FILE PHOTO: Greg Clark, Chief Executive Officer of Symantec, takes part in the Yahoo Finance All Markets Summit in New York, U.S., February 8, 2017. REUTERS/Lucas Jackson/File Photo

Symantec said CEO Greg Clark will be replaced by director Richard Hill on an interim basis. Hill was formerly CEO of semiconductor maker Novellus Systems, giving him experience in enterprise sales, an area where Symantec has faltered.

Symantec reported fiscal fourth-quarter sales of $1.19 billion, down from $1.21 billion a year ago and below analysts’ estimates of $1.21 billion, according to IBES data from Refinitiv.

The software company also said it expects first-quarter profit between 30 cents and 34 cents per share, below estimates of 40 cents per share.

Shares fell 13 percent in after-market trading.

“This is a disaster of epic proportions. The guidance combined with abrupt CEO departure will be a major gut punch to the Street. There are a lot of questions with minimal answers,” Daniel Ives, analyst at Wedbush said.

When asked about Clark’s sudden departure by analysts on a call after the earnings announcement, Hill said: “He (Clark) has had issues with his father being ill. And the pressure is quite high that we want to continue to deliver strong financial results and also growth on the top line for shareholders, simultaneously.”

The leadership change follows multiple key executive exits at Symantec late last year, including the chief operating officer and the chief marketing officer.

The company posted net income of $34 million, or 5 cents per share, in the reported quarter, compared with a loss of $59 million, or 10 cents per share, a year earlier.

On an adjusted basis, the company’s profit was 39 cents per share, in line with estimates.

Revenue from Symantec’s enterprise security division fell to $584 million, below estimates of $607 million. The consumer security division’s revenue of $605 million was above expectations of $601 million.

Symantec also named Vincent Pilette, formerly with Logitech, as its new chief financial officer, replacing Nicholas Noviello whose departure was announced in January.

Reporting by Angela Moon in New York and Vibhuti Sharma in Bengaluru; editing by Anil D'Silva and Rosalba O'Brien

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