Security software maker Symantec Corp. (SYMC: Quote) said Wednesday after the markets closed that its second quarter profit rose 6% from last year, as revenue increased and the company reigned in on expenses.
The company's quarterly earnings per share, excluding items, also came in above analysts' expectations as did its quarterly revenue.
At the same time, the company gave an upbeat revenue outlook for the third quarter, but forecast earnings for the quarter below analysts' current consensus estimate.
"We delivered better than expected results with record September revenue and deferred revenue, in addition to strong net income and EPS as we continue to make improvements to the performance of our businesses," said James Beer, executive vice president and chief financial officer, Symantec. "We saw strength in enterprise security and backup as well as growth in consumer security."
Symantec shares are currently gaining 7.02% in after hours trading after closing the day's regular trading session at $17.38, up a penny. The shares trade in a 52-week range of $13.06 to $19.54.
This is Symantec's first quarterly earnings under CEO Steve Bennett, who replaced Enrique Salem in July.
The company's consumer segment revenue fell 1% year-over-year, while its security and compliance segment revenue increased 6%. Storage and server management segment revenue declined 2% year-over-year, while services revenue grew 2%.
International revenue represented 51% of total revenue for the second quarter and increased 1% from a year earlier.
The Americas, including the United States, Latin America and Canada, represented 54% of total revenue and increased 2% year-over-year.
Europe, Middle East and Africa revenue fell 4% from last year, while Asia Pacific/Japan revenue rose 6%.
For the second quarter ended September 28, 2012, the Mountain View, California-based company reported net income of $193 million or $0.27 per share, compared to $182 million or $0.24 per share for the year-ago quarter.
Excluding items, adjusted net income for the second quarter was $322 million or $0.45 per share, compared to $295 million or $0.39 per share in the prior year quarter.
On average, 31 analysts polled by Thomson Reuters expected the company to earn $0.38 per share for the second quarter. Analysts' estimates typically exclude special items.
Total net revenue for the second quarter rose 1% to $1.70 billion from $1.68 billion in the same quarter last year. Twenty-eight analysts had a consensus revenue estimate of $1.66 billion for the second quarter.
Deferred revenue for the second was $3.619 billion, up 5% from $3.452 billion in the second quarter of last year.
Gross margin for the second quarter narrowed to $83.3% from 84.2% a year ago, while adjusted gross margin shrank to 84.6% from 85.8% last year.
However, operating margin for the quarter improved to 18.0% from 17.0% a year ago, while adjusted operating margin increased to 27.5% from 25.5% last year.
During the second quarter, Symantec repurchased 12 million shares of its common stock for $200 million, and ended the quarter with cash, cash equivalents and short-term investments of $4.0 billion. The company has $483 million remaining in the current board authorized stock repurchase plan.
Looking forward to the third quarter, the company forecast revenue of $1.72 billion to $1.75 billion, earnings of $0.17 to $0.19 per share and adjusted earnings of $0.36 to $0.38 per share. Analysts currently expect the company to earn $0.42 per share on revenue of $1.72 billion for the third quarter.
Deferred revenue for the third quarter is estimated to be between $3.765 billion and $3.825 billion.
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by RTT Staff Writer
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