Symantec Stock Rises Despite Lower Profit Report
Data storage and security provider Symantec revealed its fiscal second-quarter earnings results Oct. 27, reporting that its profits dipped 12 percent due mostly to higher costs related to sales and marketing projects.
In the quarter ending Sept. 30, Symantec posted a profit of $136 million, or 17 cents/share, down from $155 million, or 19 cents/share, from the same quarter a year ago. Revenue was flat at $1.48 billion.
Nonetheless, Symantec stock prices increased by 7 percent in after-hours trading Oct. 27 to about $17 for two main reasons: first, because the results beat the company's conservative forecast, and secondly because of the company's new Q3 earnings forecast of 32 cents cents a share, based on revenue of $1.57 billion to $1.59 billion.
Back in July, Symantec had predicted earnings of 27 cents to 28 cents on revenue of $1.45 billion to $1.47 billion, below Wall Street's projections at the time. Thomson Reuters' survey of analysts had forecast 32 cents and $1.46 billion.
"Our new e-commerce platform completed its first anniverary of operations with installations in 230 countries in 18 languages, and it supports 24 currencies. Overall, our enterprise business closed the quarter on a very strong note," Symantec CFO James Beer said on the earnings conference call to analysts and journalists.
"Our ability to develop more targeted programs is benefitting renewals, as well as our up-selling and cross-selling efforts. We also had good results around our backup and archiving and our hosted services."
Sales of security software--both in enterprise and in the consumer realm--have remained brisk despite the continuing macroeconomic slowdown, because keeping viruses and hackers out of a system remains a top priority.