Symantec forecasts weak results as yen depreciates
(Reuters) - Symantec Corp reported a bigger-than-expected quarterly profit, but the maker of the Norton anti-virus software forecast first-quarter results well below analysts' estimates due to a weak Japanese yen.
Symantec shares, which were trading flat after the company reported results, fell 6 percent in extended trading after it gave a weak outlook on a conference call with analysts.
"The weak yen is driving a projected foreign currency headwind of $15 million," Chief Financial Officer James Beer said.
The yen has depreciated sharply against the dollar since the Bank of Japan unleashed an intense burst of monetary stimulus last month.
IBM Corp reported a rare quarterly earnings miss last month, hurt partly by the sliding yen.
Symantec expects an adjusted first-quarter profit of 35 cents to 36 cents per share and revenue of $1.61 billion to $1.65 billion.
Analysts on average expect an adjusted profit of 44 cents per share on revenue of $1.70 billion, according to Thomson Reuters I/B/E/S.
"This is a softer outlook than investors were hoping for and speaks to the transition Symantec is going through as an organization," FBR Capital Markets analyst Daniel Ives said.
"It is still a rebuilding story."
The company, however, reported a bigger-than-expected fourth-quarter profit - the third time in a row that it beat analysts' estimates under new Chief Executive Steve Bennett, who has been trying to turn the company around.
Bennett said on the call that fiscal 2014 would be a transition year for the company and he expected Symantec's restructuring to show results after fiscal 2015.
Investors were disappointed with Symantec's performance since former CEO John Thompson bought storage software maker Veritas for $13.5 billion in 2004, as the deal failed to generate the expected growth.
Symantec reported mixed results in the years that followed, repeatedly disappointing Wall Street.
The company competes with Intel Corp's McAfee division in security and EMC Corp, Oracle Corp and CommVault Systems Inc in the storage business.
STRONG SECURITY SPENDING
The company reported an adjusted profit of 44 cents per share in the fourth quarter. Analysts were expecting a profit of 38 cents per share.
"These are commendable results in a tough IT spending environment, especially on the consumer business, given a tough PC environment," FBR analyst Ives said.
Security software makers are doing well despite weak IT spending as rising cyber attacks boost demand for their products.
Spending on computer security is expected to rise to about $86 billion in 2016 from about $55 billion in 2011, market research firm Gartner said in a recent report.
The company also paid out its first-ever quarterly cash dividend of 15 cents per common share.
"The new CEO has talked the talk and walked the walk in terms of numbers," Ives said.
Net income attributable to the company fell to $188 million, or 26 cents per share, from $559 million, or 76 cents per share, a year earlier.
The company had recorded a one-time gain of $530 million in the year-ago quarter after it sold off its stake in a venture with China's Huawei. (r.reuters.com/meq87t)
Revenue rose 4 percent to $1.75 billion, while analysts expected revenue of $1.73 billion.
(Additional reporting by Supantha Mukherjee and Sayantani Ghosh in Bangalore; Editing by Sriraj Kalluvila, Roshni Menon)