Symantec cuts outlook amid 'pause' in IT spending
Symantec sees tough sledding ahead as the company cut its fiscal third quarter outlook. "Like many other companies we saw a pause in IT spending the last week of the quarter," said CEO John Thompson on a conference call.
The security software vendor said Wednesday that its third quarter earnings (statement, all resources) would be about 11 cents a share to 14 cents a share, or 30 cents a share to 33 cents a share excluding charges. Revenue for the quarter ending Jan. 2 will be $1.45 billion to $1.5 billion. Wall Street was expecting earnings of 36 cents a share on revenue of $1.61 billion.
Thompson noted that the "strengthening of the dollar also hurt our results." However, Symantec executives said that the company is well positioned to grab more customer wallet share as vendor relationships are consolidated. Even so, Thompson said that customers are taking longer to decide on deals and consumer spending may be weak. When asked if Symantec was being too conservative, executives said it only makes sense to cut the outlook.
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Symantec's outlook overshadowed a strong second quarter. The company reported net income of $140 million, or 16 cents a share, for the second quarter ending Oct. 3. Excluding charges, the company reported earnings of 37 cents a share, two pennies better than estimates.
Revenue in the second quarter was up 7 percent from a year ago to $1.52 billion.
By the numbers:
- International revenue was 50 percent of Symantec's revenue in the second quarter.
- As for Symantec's total revenue, Europe, Middle East and Africa revenue was 32 percent of sales. Asia Pacific/Japan revenue was 14 percent of the total with the Americas (including U.S., Latin America and Canada) accounting for 54 percent.
- Storage and server management accounted for 38 percent of revenue with the consumer business representing 29 percent. Security and compliance was 26 percent of the total with services accounting for 7 percent.
- Symantec signed 326 agreements compared to 302 a year ago. Of those deals, 77 topped $1 million.