Symantec posted strong fiscal second-quarter results based on continuing demand for security and storage products despite weak PC demand and an uncertain economy.
Fear
of cyber-threats and ongoing demand for digital information boosted Symantec's
second-quarter performance as enterprises and consumers continued to buy its
security and backup products, the company said.
The
company reported fiscal second-quarter revenue of $1.68 billion, a 14 percent
increase from last year's revenue of $1.48 billion. Symantec's net income was
$182 million, or 24 cents a share for the quarter ended Sept. 30. The company
beat the top end of its own revenue estimates. Excluding some costs, earnings
were 39 cents per share, which was on target with analyst estimates.
Also
boosting Symantec's bottom line were the two acquisitions, VeriSign and
Clearwell, according to Symantec CEO Enrique Salem on the company's earnings
call on Oct. 26. VeriSign, the identity management company Symantec acquired a
year ago for $1.28 billion, generated $89 million in revenue during the
quarter. Clearwell, acquired in May for $390 million, generated $20 million.
The acquisitions performed well "against our expectations," Salem
said.
"We
continue to effectively integrate and grow our acquired assets, as demonstrated
by the authentication business once again generating strong results for the
fifth consecutive quarter," said James Beer, Symantec's executive vice
president and CFO.
Beer
also noted there continued to be strong demand for security and storage
products, despite the overall concerns about the uncertain economy. Revenue in
the security and compliance and storage and server management segments accounted
for 65 percent of total revenue.
The
explosion of cyber-attacks and the increasingly sophisticated nature of threats
are driving consumers and enterprises to invest in security products, according
to Salem. Threats are more targeted and attackers are going after everyone,
including individuals, small businesses, large enterprises and government
agencies, he said.
The
security and compliance segment had the strongest performance of all Symantec
businesses, with a 27 percent boost in sales. The segment includes enterprise
security, managed security services, data loss prevention and authentication.
Salem
touted the success of Symantec Endpoint Protection 12, which launched in July
and has already been deployed on more than 1.3 million endpoints. Customers are
"increasingly relying" on Symantec's Managed Security Services to
protect their environments and information as they struggle to meet IT staffing
needs, according to Salem.
The
data loss prevention business performed well "as information protection
continues to be top of mind for corporations and governments around the
world," he said.
The
storage and server management segment climbed 8.6 percent, led by Symantec's
portfolio of backup products. Storage growth was strengthened by the fact that
Symantec's backup products include deduplication technology and virtualization
capabilities, according to Salem.
Adoption
of NetBackup appliances grew during the quarter as customers took advantage of
"backup, deduplication and the media server in a single appliance,"
Salem said.
The
Clearwell eDiscovery team, in its first full quarter with Symantec since the
acquisition, signed the largest deal in its history with the federal government
during the quarter, according to Salem. "As expected, Clearwell's eDiscovery
solution complements our archiving capabilities," Salem said.
Despite
weak consumer demand for personal computers, Symantec's consumer segment
increased 11 percent during the second quarter, compared with the comparable
period a year ago. Consumer products now make up 31 percent of total revenue,
Beer said.
"We
continue to see good demand for our products and services across the
portfolio," Salem said.
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