McAfee vs. Symantec: Dueling in consumer and enterprise

The most recent quarterly reports from McAfee and Symantec highlight some trench warfare in both the enterprise and consumer markets.

Both companies reported solid quarters, but Symantec was the one that really knocked the cover off the ball. Symantec reported fiscal second quarter net income of $150 million, or 18 cents a share, on revenue of $1.47 billion. Non-GAAP earnings were 36 cents a share, three cents ahead of Wall Street estimates.

But what was curious is the reason behind Symantec's surge. Sure, CEO Enrique Salem has given Symantec more focus, but the quarter got a lift from small and mid-sized businesses and consumers. The consumer business coupled with improving enterprise trends enabled Symantec to maintain its outlook for the next quarter.

Salem said on a conference call:

We started to see initial signs of progress in SMB security as we renewed our relationships with channel partners given the launch of our new security products. We also saw strength in the consumer segment as our business continues to benefit from our market-leading products...The strength of our Consumer business was driven by strong Norton 360 sales and by our relationships with eight of the top nine OEMs...During the quarter, we won consumer online backup deals with Toshiba and Acer. We now have backup relationships with four of the top five OEMs.

Add it up and Symantec's consumer business was up 6 percent to $463 million in the second quarter compared to a year ago. All other businesses---security and compliance and storage---were down anywhere from 3 percent to 9 percent.

Enter McAfee. McAfee's quarter was also solid (statement). The company reported fiscal third quarter earnings of $36.8 million, or 23 cents a share, on revenue of $485.3 million, up 18 percent from a year ago. Non-GAAP earnings were 62 cents a share, two cents better than estimates. Revenue, however, fell short of the $487 million projected by Wall Street.

McAfee also projected fiscal fourth quarter non-GAAP earnings of 61 cents a share to 65 cents a share. Wall Street was looking for 63 cents a share.

Under the hood though, McAfee showed a 25 percent jump in its corporate business. Third quarter corporate revenue checked in at $308 million. On the consumer side of the house, McAfee had revenue of $177 million, up 8 percent from a year ago.

Based on growth rates, it appears Symantec is taking it to McAfee in the consumer market. In the enterprise, McAfee, which is much smaller than Symantec, appears to be gaining some strength from a smaller base.