Security software maker Symantec Corp. (SYMC) Tuesday reported a sharp decline in fourth-quarter profit from a year ago, when it benefited from a joint venture stake sale to Huawei.
Nevertheless, excluding items, adjusted earnings climbed from a year ago to top Wall Street estimates. Revenues also came in ahead of expectations, driven by growth in its backup business and as demand for data loss prevention and other information security products gained traction.
Symantec shares were down near six percent in after-hours trade on the Nasdaq, following the announcement of results.
"In a year of significant leadership changes and development of a new company strategy, the team remained focused on running the business to deliver better than expected results," said Chief Executive Steve Bennett.
Increased hacking activities have spurred the sales of antivirus protection products. Apart from individuals, hackers have intensified attacks on governmental institutions and key installations, thereby buoying demand for software security products.
Mountain View, California-based Symantec reported quarterly net income of $188 million or $0.26 per share, compared with $559 million or $0.76 per share last year.
Results for the prior-year quarter included a gain of $530 million related to its 49 percent joint venture stake sale to Huawei.
Excluding items, adjusted earnings for the fourth quarter were $314 million or $0.44 per share, compared with $283 million or $0.38 per share in the prior year.
On average, 29 analysts polled by Thomson Reuters expected earnings of $0.38 per share for the quarter. Analysts' estimates typically exclude one-time items.
Gross margin for the quarter was lower by five basis points at 82.4 percent, while operating margin improved to 14.4 percent from 11.4 percent a year ago.
The maker of Norton anti-virus software said revenues for the quarter grew 4 percent to $1.75 billion from $1.68 billion a year ago. Analysts had consensus revenue estimate of $1.73 billion for the quarter.
Storage and Server Management segment revenue climbed 7 percent from last year, and Services revenue was up 9 percent. Consumer segment and Security & Compliance segment saw modest growth. Consumer category is facing pressures with a shift in user preference from PCs to mobile devices.
Deferred revenue at the end of the quarter totaled $4.02 billion, compared with $3.97 billion in the prior year.
Symantec declared a quarterly cash dividend of $0.15 per common share, payable June 27 those of record on June 19.
In January, Symantec split the roles of chairman and chief executive officer, with Dan Schulman elected non-executive chairman and Steve Bennett retained as CEO.
The company is reducing its middle management position and the process is to complete by the end of June 2013.
Symantec stock closed Tuesday's regular trade at $25.10, up 0.60%, on a volume of 10 million shares on the Nasdaq. In after hours, the stock fell $1.47 or 5.86%. In the past year, the stock has trended in a range of $13.06 - $25.26, with a three-month average volume of 7.45 million shares.
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