McAfee CEO sees economy improving

BOSTON (Reuters) - McAfee Inc's CEO said that his company is benefiting from a recovery in technology spending by businesses from North America to Europe and increased sales to U.S. and government agencies.

Dave DeWalt, chief executive of the world's No. 2 security software maker, also said in an interview on Thursday that McAfee's consumer software business remains strong, bucking a broader trend that is hurting the retail sector.

"There is still a lot of malaise over the consumer spending appetite. That's still challenged. I think it will be for the next few quarters," DeWalt said.

McAfee's sales have been growing, pushing revenue up 18 percent in the company's most-recent quarter, even as the recession has stalled growth at arch rival Symantec Corp. Revenue at Symantec dropped 13 percent last quarter as McAfee claimed market share from the top security software maker.

DeWalt said that technology spending by most U.S. businesses has returned to traditional patterns and continues to head in the right direction.

While corporate IT spending by businesses in western Europe is becoming more stable, it has yet to pick up in eastern Europe, he said. He added that he sees signs that it will recover in that region over the next few quarters.

DeWalt also said that sales to government agencies in the United States and other countries are one of the bright spots in his business.

Analysts predict that that spending will grow more quickly than the consumer or business security markets as U.S. President Barack Obama looks to spend billions of dollars to protect the country's cyber infrastructure and encourages corporations to do the same.

Governments around the globe are following suit amid an increase in cyber crime, espionage and terrorism spread over the Internet.

"Government has become the largest sector for security spending," DeWalt said.

He made the upbeat comments just a week before McAfee closes its current quarter. DeWalt declined to discuss specifics on the company's performance.

Jefferies & Co analyst Katherine Egbert said that she is optimistic the company is poised to report a strong quarter because he painted a positive picture of McAfee's business in its most important markets.

"It looks like strength across the board," she said.

McAfee shares closed down 1.1 percent to $41.42, in line with the 1.1 percent drop in the Nasdaq Composite Index.

(Reporting by Jim Finkle; Editing by Phil Berlowitz)