UPDATE 2-Symantec expects full-year profit above Street

Thu May 8, 2014 6:36pm EDT

* 4th-qtr adj profit/shr $0.47 vs est $0.42

* 4th-qtr revenue down 7 pct to $1.63 bln

* Sees 2015 adj profit/shr $1.84-$1.92 vs est $1.83

* Sees 2015 revenue $6.63-$6.77 bln vs est $6.66 bln

* Shares up 2 pct in extended trading (Adds comments from CEO interview; adds conference call details, updates shares)

By Soham Chatterjee

May 8 (Reuters) - Struggling security software maker Symantec Corp posted a better-than-expected quarterly profit, helped by cost cutting, and forecast full-year profit above Wall Street expectations.

Shares of the company, battling falling sales amid eroding PC sales, rose about 2 percent after the bell.

Symantec interim CEO Mike Brown said he expects revenue to fall in the first quarter but to grow in the second half of the year ending March 31, 2015, helped by new mobile and security products, license renewals, higher pricing and cost cuts.

The company, known for its Norton antivirus software, also expects adjusted operating margins to improve to 30 percent by the fourth quarter as it expands its cost cutting programs.

The company had earlier forecast operating margins to grow above 30 percent by March 31, 2017.

Symantec is expected to benefit from higher spending by companies on security software to protect their network and data from sophisticated hacking attacks and malware.

Worldwide spending on security software is expected to grow to more than $86 billion in 2016, according to research firm Gartner Inc. (r.reuters.com/qyx89t)

Companies such as FireEye Inc, Palo Alto Networks Inc and Checkpoint Systems Inc have fared better than Symantec in selling software to detect and respond to threats in real time until now.

Symantec's smartphones and tablet security products have also failed to compete against software from companies such as Lookout Inc and China-based NQ Mobile Inc.

Symantec said on Thursday it expected an adjusted profit of $1.84-$1.92 per share on revenue of $6.63-$6.77 billion for the full year.

Analysts on average were expecting a profit of $1.83 per share on revenue of $6.66 billion, according to Thomson Reuters I/B/E/S.

The company also expects first-quarter adjusted profit of 41-43 cents per share on revenue of $1.65-$1.69 billion.

Analysts were expecting a profit of 43 cents per share on revenue of $1.64 billion.

The company's adjusted operating margins increased to 27.1 percent in the first quarter ended March 28 from 24.1 percent a year earlier. Total operating expenses fell 12 percent.

Net income attributable to the company rose to $217 million, or 31 cents per share, from $190 million, or 27 cents per share, a year ago.

On an adjusted basis, the company earned 47 cents per share beating analysts' estimates of 42 cents per share.

Revenue fell 7 percent to $1.63 billion in the fourth quarter from $1.75 billion a year earlier. Analysts had expected $1.65 billion.

"With the departure of ex-CEO Steve Bennett during the quarter, investors were fearing the worst. Instead, the company delivered results that slightly exceeded Street expectations," FBR Capital Markets analyst Daniel Ives said.

Bennett, fired last month, was the second Symantec CEO to be sacked in less than two years.

The company, under pressure to break up, has hired JPMorgan Chase & Co to explore strategic options and defend against activist investors, according to Bloomberg. (r.reuters.com/tar29v)

Shares of the company closed at $20.13 on the Nasdaq on Thursday. The stock has lost about 15 percent of its value in the year so far. (Reporting by Soham Chatterjee; Editing by Rodney Joyce and Joyjeet Das)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.