Symantec Corp. (SYMC), Wednesday said its first quarter profit more than doubled from a year ago, as higher operating income and the absence of a prior year tax provision, helped offset revenue performance that remained flat due to slowness among IT buyers, impacting storage management products.
Looking ahead, Symantec said it expects second quarter profit to come in below current Street estimates.
The Mountain View, California-based company's net income for the first quarter was $161 million or $0.20 per share, up from $74 million or $0.09 per share in the same quarter a year ago.
On a non-GAAP basis, net income was $284 million or $0.35 per share, up 6% from prior year's $277 million or $0.33 per share
On average, twenty-eight analysts polled by Thomson Reuters expected earnings of $0.35 per share for the quarter. Analysts' estimates typically excludes one-time items.
The current quarter included benefit from income taxes of $4 million, compared to provision of $42 million included in the year-earlier quarter.
The security and storage solution provider's total net revenues were essentially flat at $1.433 billion, compared to $1.432 billion recorded in the year-earlier quarter. After adjusting for currency, revenues were up 2%. Street analysts expected revenues of $1.47 billion for the quarter.
"On a constant currency basis, we saw year-over-year revenue growth across all of our geographies and solid deferred revenue performance," said James Beer, executive vice president and chief financial officer
Deferred revenue as of July 2, 2010, was $2.998 billion compared with $2.973 billion as of July 3, 2009, up 1 percent year-over-year. After adjusting for currency, deferred revenue increased 3%.
Revenue from Symantec's Consumer segment rose 6%, while Security and Compliance segment increased 1% from the prior year quarter. The Storage and Server Management segment posted a decline of 5%, while services revenue remained flat compared to the prior year.
Total operating expenses were $974 million, compared to $968 million in the corresponding quarter a year ago. Operating income was $194 million, compared to $152 million in the same quarter last year. Operating margin for the first quarter of fiscal year 2011 was 13.5%.
During the quarter, Symantec repurchased approximately 14 million shares for $200 million at an average price of $14.49. Symantec has $547 million remaining under the current authorized stock repurchase plan.
Amongst others, McAfee Inc. (MFE) reported that its first- quarter net income was $37.58 million or $0.23 per share, down from $53.46 million or $0.34 per share in the same quarter last year. Net Revenues for the quarter were $502.75 million, compared to $447.71 million in the prior year quarter.
Looking ahead to the second quarter of fiscal year 2011, Symantec said it expects earnings in a range of $0.09 - $0.10 per share and non-GAAP earnings in a range of $0.27 - $0.28 per share. Analysts' currently expects earnings of $0.34 per share for the quarter.
Revenue is estimated to range between $1.445 billion and $1.465 billion, down 1% to 2% year-over-year and up 1% to 3% after adjusting for currency, while Street analysts' currently sees revenues of $1.53 billion for the quarter.
Deferred revenue is expected to be in the range of $2.830 billion and $2.860 billion, down 2% to 3% year-over-year and up 2% to 3% after adjusting for currency.
On July 15, 2010, brokerage RBC Capital Mkts downgraded SYMC to 'Sector Perform' from 'Outperform,' with a mean target of $19.37.
SYMC closed Wednesday's regular trading at $14.67, down $0.32 or 2.13%, on a volume of 12.90 million shares. In after-hours, the stock further dropped $1.17 or 7.98% to trade at $13.65. In the last 52-week period, the stock traded in range of $13.58 - $19.16, with a three-month average volume of 15.30 million shares.
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