Symantec Reports Improved Revenue, Lower Profit Margin

By Chris Preimesberger  |  Posted 2011-01-26 Print this article Print

The company reports net income for its third quarter of $132 million, compared with $301 million for the same quarter in 2010.

In its fiscal third-quarter earnings report on Jan. 26, data protection provider Symantec had some good news and some not-so-good news: It reported a 4 percent increase in its overall revenue but also that its profit margin slipped 56 percent from a year ago.

Nonetheless, the company's quarterly earnings per share (17 cents) exceeded Wall Street analysts' expectations.

Symantec attributed the profit percentage decrease to higher operational costs due to recent acquisitions.

In the quarter, the company's VeriSign security acquisition generated revenue of $48 million and the PGP and GuardianEdge acquisitions generated total revenue of $18 million.

The diversified Mountain View, Calif.-based company reported net income for its third quarter ended Dec. 31 of $132 million, compared with $301 million for the same quarter in 2010.

Consolidated GAAP (Generally Accepting Accounting Principles) revenue for the fiscal third quarter was $1.604 billion, up 4 percent year over year-5 percent after adjusting for currency exchanges.

In the quarter, Symantec's consumer segment represented 31 percent of total revenue and increased 4 percent year over year. Its security and compliance segment represented 26 percent of total revenue and increased 13 percent year over year.

Symantec's storage and server management businesses represented 37 percent of total revenue and increased 1 percent year over year. Services, which have been a concern in recent months, represented 6 percent of total revenue and declined 17 percent year over year.

Symantec also said that it will undertake a $1 billion stock repurchase initiative. During the third quarter of fiscal year 2011, the company repurchased about 16 million shares for $265 million at an average price of $17.03. Symantec has $1.06 billion remaining in the stock repurchase program.

Symantec's stock price was up about 2.5 percent in after-hours trading to $18.25 following the report.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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