Symantec forecast misses estimates as PC market weakens
(Reuters) - Symantec Corp, maker of Norton anti-virus software, reported lower-than-expected second-quarter revenue and forecast current-quarter results below expectations, hit by low demand for storage and security products and a weak PC market.
Symantec shares fell more than 13 percent in extended trading on Wednesday.
The company said it expected third-quarter adjusted earnings of 41 cents to 43 cents per share on revenue of $1.63 billion to $1.67 billion. Analysts on average had expected earnings of 51 cents per share on revenue of $1.79 billion.
Symantec's consumer business sells products and services to individuals and home businesses globally through e-commerce platform, internet-based resellers and retailers.
Chief Executive Steve Bennett said that while the business was not a big profit driver, Norton was here to stay.
"Protecting Windows desktop PCs - we won that game with Norton ... It's not a growth business, but it's not going away either," Bennett told Reuters.
However, he said Symantec planned to launch new products that would ensure information security across devices.
Symantec said it expected revenue to fall by 3 or 4 percent in the year to end-March. Earnings are forecast to fall within a range of a decline of 1 percent to an increase 1.5 percent.
The company said it expected to resume revenue and earnings growth in early fiscal 2015.
Symantec also has partnerships with original equipment manufacturers to distribute internet security suites and online backup offerings.
"They've had growth challenges both on the security and on the storage front, and the consumer PC environment is not great, and they're heavily tied to that market," FBR Capital Markets analyst Dan Ives told Reuters.
Research firm Gartner has said it expects shipments of desktop and laptop computers to fall about 11.2 percent to 303 million units in 2013.
Symantec's net income rose to $241 million, or 34 cents per share, in the second quarter, from $189 million, or 27 cents per share, a year earlier.
Excluding items, the company earned 50 cents per share.
Revenue fell 3.5 percent to $1.64 billion.
Analysts on average were looking for adjusted earnings of 44 cents per share on revenue of $1.69 billion, according to Thomson Reuters I/B/E/S.
Revenue from Symantec's information management business fell 5 percent in the quarter, accounting for about 37 percent of total revenue.
The business helps companies manage information by providing backup and recovery, archiving and storage management.
Symantec has been reorganizing its sales force and spending more to develop new products.
"I'm disappointed in our performance this quarter, because while we made the right moves ... I underestimated the impact that would have on our short term revenue," Bennett said.
Symantec's shares were down 13.4 percent at $21.32 in extended trading.
(Reporting by Chandni Doulatramani in Bangalore; Editing by Don Sebastian and Ted Kerr)
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