Security software maker Symantec Corp. (SYMC) said Wednesday that its third quarter profit surged 82% from last year, helped by higher revenue and improved margins. The company's quarterly earnings per share, excluding items, also came in above analysts' expectations as did its quarterly revenue. However, the company forecast fourth quarter revenue and earnings below analysts' current consensus estimate.
The Mountain View, California-based company reported GAAP net income for the third quarter of $240 million or $0.32 per share, compared to $132 million or $0.17 per share for the year-ago quarter.
Excluding items, non-GAAP net income for the third quarter was $314 million or $0.42 per share, compared to $272 million or $0.35 per share in the prior year quarter.
On average, 30 analysts polled by Thomson Reuters expected the company to earn $0.41 per share for the third quarter. Analysts' estimates typically exclude special items.
GAAP gross margin for the quarter improved to 84.2% from 83.5% a year earlier, while non-GAAP gross margin increased to 85.7% from 85.3% last year.GAAP operating margin for the quarter improved to 17.5% from 14.3% a year earlier, while non-GAAP operating margin increased to 26.2% from 23.6% last year.
Revenue for the third quarter rose 7% to $1.72 billion from $1.60 billion in the same quarter last year. Twenty-eight analysts had a consensus revenue estimate of $1.71 billion for the third quarter.
GAAP deferred revenue as of December 30, 2011, was $3.665 billion up 8% from $3.408 billion a year ago.
"We delivered record December quarter revenue and deferred revenue, as well as double digit earnings per share growth," said James Beer, executive vice president and chief financial officer, Symantec. "Our results were driven by strength in Data Loss Prevention, Authentication, Managed Security Services and Backup. Due to effective cross-selling of our industry leading portfolio, large deals hit an all time high."
For the third quarter, Symantec's consumer segment revenue represented 31% of total revenue and increased 5% year-over-year, while its security and compliance segment revenue represented 30% of total revenue and increased 17% year-over-year.
The company's storage and server management segment revenue represented 36% of total revenue for the quarter and increased 3% year-over-year, while its services segment revenue represented 3% of total revenue and decreased 13% year-over-year as expected due to the company's move to a partner-led consulting model.
International revenue represented 52% of total revenue in the third quarter and increased 6% year-over-year. The Americas, including the United States, Latin America and Canada, revenue represented 55% of total revenue and increased 8% year-over-year.
During the third quarter, Symantec repurchased about 13 million shares of its common stock for $220 million. The company had $184 million remaining in the current board authorized stock repurchase plan at the end of the December quarter.
Separately, Symantec said that its Board of Directors has approved a new $1 billion share repurchase program.
Looking forward to the fourth quarter, the company forecast revenue of $1.72 billion to $1.73 billion, GAAP earnings of $0.23 and $0.24 per share and non-GAAP earnings of $0.41 and $0.42 per share. Analysts currently expect the company to earn $0.43 per share on revenue of $1.75 billion for the fourth quarter.
Symantec shares, which have traded in a range of $15.36 to $20.50 over the past year, closed Wednesday's regular trading session at $17.07, up 20 cents or 1.19%. The stock is currently gaining 20 cents or 1.17% in after hours trading.
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