Security software maker McAfee, Inc. (MFE), said Thursday its second quarter profit increased 38% from last year, as revenue grew 5% over last year. Earnings for the quarter came in above analysts' expectations, but revenues fell short. Looking ahead, the company issued its forecast for the third quarter. Separately, McAfee said it would acquire tenCube, provider of the WaveSecure mobile security service.
The Santa Clara, California-based company reported net income for the second quarter of $39.4 million or $0.25 per share, compared to $28.7 million or $0.18 per share in the year-ago quarter.
Excluding stock options expense and other items, non-GAAP net income for the quarter rose to $98.2 million or $0.63 per share from $94.7 million or $0.60 per share in the similar quarter of 2009.
On average, thirty-two analysts polled by Thomson Reuters expected the company to earn $0.60 per share for the quarter. Analysts estimates typically exclude special items.
GAAP operating income for the quarter declined 1% to $55.1 million from $55.9 million a year ago, while non-GAAP operating income increased 3% to $129.4 million from $125.4 million last year.
GAAP revenue for the quarter increased 4% to $489.2 million from $268.7 million in the prior-year quarter.
Revenues for the quarter included $6.12 million from the impact of signature file update. Excluding the item, non-GAAP revenue for the quarter grew 6% to $495.3 million from $468.7 million in the same quarter last year. Twenty-nine analysts had a revenue consensus of $507.42 million for the second quarter.
Among peers, security and storage solution provider Symantec Corp. (SYMC) yesterday reported a first-quarter profit that 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. The company's net income for the first quarter was $161 million or $0.20 per share, on revenues of $1.433 billion for the first quarter.
North America revenue for the quarter increased 8% to $286 million, accounting for 58% of the company's total revenue, while international revenue was almost flat with last year at $203 million.
Second quarter revenue for the company's corporate business grew 2% to $298 million from a year ago. During the second quarter, McAfee closed 474 deals greater than $100,000 in value, including 78 deals greater than $500,000 in value and 30 deals greater than $1 million in value. Consumer business revenue increased 8% to $191 million in the second quarter.
During the quarter, the company repurchased about 4.6 million shares of its common stock for $150 million under its $500 million stock repurchase program with $200 million balance remaining under the current board approved authorization.
Looking forward to the third quarter, the company forecast revenue in the range of $505 million to $520 million, GAAP earnings of $0.29 to $0.33 per share and non-GAAP earnings of $0.62 to $0.66 per share.
Analysts currently expect the company to earn $0.65 per share on revenue of $522.79 million for the second quarter.
Separately, McAfee announced that it has signed a definitive agreement to acquire privately owned tenCube, the provider of the WaveSecure mobile security service. The financial terms of the transaction were not disclosed.
Adding WaveSecure's locate, lock, back-up and wipe technology to Trust Digital's enterprise mobility management and McAfee's mobile security technology, gives McAfee the capabilities it needs to deliver the industry's most complete next generation mobility platform.
According to Ericsson, there will be 50 billion IP connected devices in 2020, up from 1 billion currently. With the proliferation of these devices comes the need to secure and manage them.
McAfee shares, which have traded in a range of $36.51 to $45.68 over the past year, closed Thursday's regular trading session at $39.53, down 39 cents. Th stock is currently losing $3.93 or 9.94% in after hours trading.
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