Symantec Profit Rises 31% on Cost-Cutting

   By Michael Calia 
 

Symantec Corp. (SYMC) said its fiscal third-quarter profit rose 31%, with lower costs obscuring a decline in revenue.

Looking ahead, the software company said it expects fiscal year adjusted earnings of $1.85 to $1.87 a share on revenue of $6.67 billion to $6.71 billion. Analysts polled recently by Thomson Reuters were expecting $1.77 a share and $6.65 billion, respectively.

For the current period, the Mountain View, Calif., company projected adjusted earnings of 40 cents to 42 cents a share and $1.62 billion to $1.66 billion in revenue. Analysts were expecting 41 cents a share and $1.64 billion, respectively.

Symantec, which produces Norton antivirus software, among other products, has struggled in shifting its consumer security business to subscriptions away from one-time license sales. The company, which also makes data management and security products for enterprise customers, also has been pursuing a reorganization plan to contend with weak earnings as well as the lasting effect of expensive acquisitions.

Last year, the company targeted 5% organic revenue growth and operating margins of 30% by 2015. In the most recent period, the company posted an operating margin of 23.8%, up from 17% a year ago, as total operating expenses fell 14%.

For the quarter ended Dec. 27, Symantec posted earnings of $283 million, or 40 cents a share, up from $216 million, or 31 cents a share, in the prior-year period. Excluding certain items, per-share earnings rose to 51 cents from 45 cents. Revenue fell 4.8% to $1.71 billion.

The company in October had projected adjusted earnings of 41 cents to 43 cents a share on revenue of $1.63 billion to $1.67 billion.

Gross margin widened to 83.4% from 83.3% with input costs falling 5.4%.

Revenue from content, subscription and maintenance edged down to $1.51 billion, while license revenue fell 27% to $197 million.

Shares of Symantec were down 1.9% at $23.70 after-hours Wednesday.

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