Categories Analysis, Earnings, Technology

Symantec Q2 results beat amid strong demand for cybersecurity tools

Bouncing back after its dismal performance in the recent quarters, cybersecurity firm Symantec Corp. (SYMC) posted stronger-than-expected results for the September quarter. The market responded promptly and the company’s stock gained about 8% Thursday after the closing bell.

Excluding one-off items, adjusted earnings increased 5% to $0.42 per share during the three-month period, far exceeding the Wall Street projection. The unadjusted net loss narrowed to $8 million or $0.1 per share from $12 million or $0.02 per share a year earlier.

Revenues, meanwhile, dropped 5% to $1.18 billion but came in above the estimate. Revenue from the Consumer Security segment moved up 8.5% to $601 million, benefitting from cross-selling to direct customers and higher earnings per user.  Enterprise Business revenues dropped 16% to $574 million. However, the management allayed investors’ concerns over the slump, saying the second half is the most seasonally favorable period for the division.

The top-line dropped after higher revenue from the Consumer Security segment was more than offset by a slump in  the Enterprise Business division

“Symantec’s significant investments in cyber defense make us an essential partner for enterprises and consumers of all sizes. We have reaffirmed our guidance for the fiscal year 2019 and enter the seasonally strong second half of our fiscal year with a renewed focus on technology leadership and execution,” said CEO Greg Clark.

For the third fiscal quarter, the company projects adjusted earnings per share in the range of $0.37 to $0.41 on revenues of $1.15 billion-$1.18 billion. The estimate for unadjusted earnings per share is between $0.02 and $0.05.

Symantec stock plunges after weak outlook

In the whole of fiscal 2019, adjusted earnings per share are expected to be in the range of $1.47 to $1.57 on revenues between $4.64 billion to $4.76 billion.

Symantec’s shares suffered a double whammy earlier this year when it announced an 8% workforce reduction, damping investor sentiment that was already hurt by legal issues related to an investigation into its accounting practices.

Battered by the hectic selloff that followed the downbeat earnings reports in the previous three quarters, the stock plunged 34% in the past twelve months. After making solid gains Thursday in the after hours, the stock traded higher throughout Friday.

 

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