January 31, 2019 / 9:27 PM / 21 days ago

Symantec beats earnings estimates, CFO to step down

(Reuters) - Antivirus software maker Symantec Corp shares rose in extended trade on Thursday after beating profit and revenue estimates in the December quarter and raising guidance on strong enterprise and consumer businesses.

The Symantec logo is pictured on a screen June 13, 2016. REUTERS/Thomas White/File Photo

The company also announced that its Chief Financial Officer Nicholas Noviello will be stepping down to pursue other opportunities, following a slew of key executive exits since late last year.

The cybersecurity company’s strong earnings, boosted by consumer and enterprise businesses, followed better-than-expected results in the previous quarter, a sign that the once-troubled cybersecurity firm is on track to stable growth, according to analysts.

“Even the good earnings last quarter still left investors with some skepticism, but the beat this time will erase some of those concerns,” said Dan Ives, managing director at Wedbush Securities.

Symantec raised its guidance for the current quarter, projecting March quarter adjusted earnings between 37 cents and 41 cents per share. Analysts were expecting 38 cents.

“After a difficult first half of the year, we’re gaining momentum, and the business is our core focus,” Chief Executive Officer Greg Clark said during the earnings call.

Regarding the departure of the company’s CFO, Clark said Noviello will remain in the role until mid-2019 as the company searches for a replacement.

There were multiple key executive exits at Symantec late last year, including those of President and Chief Operating Officer Michael Fey, Chief Marketing Officer Michael Williams and the senior vice president of worldwide sales engineering and product marketing, Bradon Rogers.

Symantec spokeswoman declined to give further explanation on Noviello’s departure.

Revenue from Symantec’s consumer security division rose 3 percent to $602 million. The segment accounted for nearly half the company’s total revenue. Analysts on average had expected $600.9 million, according to IBES data from Refinitiv.

Revenue from Symantec’s enterprise security division fell 2.5 percent to $609 million, but beat estimates of $575.6 million, according to IBES data from Refinitiv.

For the current quarter, Symantec projected a revenue between $595 million and $605 million for its consumer business and a revenue between $595 million and $615 million for its enterprise business. Analysts on average expect the company to post revenues of $620.5 million and $592.70 million, respectively.

Symantec’s profit fell to $65 million or 10 cents per share, in the quarter ended Dec. 28, compared with a profit of $1.34 billion, or $2.01 per share, a year earlier.

On an adjusted basis, the company earned 44 cents per share, well above estimates of 39 cents a share.

Revenue inched up to $1.21 billion in the three months ended Dec. 28, above analysts’ average estimate of $1.18 billion, according to IBES data from Refinitiv.

Symantec shares closed up 1 percent at $21.02 on Thursday. The stock lost a third of its value last year, pressured by an investigation over its accounting practices and weak revenue forecasts.

Reporting by Angela Moon in New York and Vibhuti Sharma in Bengaluru; editing by Peter Cooney and Diane Craft

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