Symantec Profit Drops; Outlook Weak

(RTTNews) - Security software maker Symantec Corp (SYMC), on Thursday reported a decline in fourth-quarter profit, hurt by a stronger dollar, a slump at consumer security business, and as well on weak margins. Quarterly results missed Wall Street estimates.

Symantec, which is splitting its 'Veritas' information management business, provided a weak outlook for the first quarter and full year 2016.

Following the announcement, Symantec shares slid 2.7 percent in after-hours trade on the Nasdaq.

Symantec, based in Mountain View, California, reported fourth-quarter net income of $176 million or $0.25 per share, compared with $217 million or $0.31 per share last year.

Excluding items, adjusted earnings for the quarter were $0.43 per share, compared with $0.48 per share a year ago.

On average, 27 analysts polled by Thomson Reuters expected earnings of $0.44 per share for the quarter. Analysts' estimates typically exclude special items.

Symantec, the maker of Norton anti-virus software, said revenues for the quarter fell 7 percent to $1.52 billion from $1.63 billion in the prior year.

Adjusted revenues totaled $1.55 billion, compared with $1.65 billion last year. Twenty-four analysts had a consensus revenue estimate of $1.56 billion for the quarter.

The company's gross margin for the quarter dropped to 81.1 percent from 82.6 percent a year ago, and operating margin slid to 10 percent from 18.8 percent.

For the first quarter, Symantec expects adjusted earnings of $0.41 to $0.44 per share on revenues of $1.50 billion to $1.54 billion. Analysts currently expect earnings of $0.45 per share on revenues of $1.62 billion for the quarter.

For the fiscal year 2016, the company expects adjusted earnings of $1.80 to $1.90 per share on revenues of $6.21 billion to $6.35 billion. Analysts expect earnings of $1.90 per share on revenues of $6.38 billion.

Symantec declared a quarterly cash dividend of $0.15 per share.

In October, Symantec said it would separate into two independent publicly traded companies by the end of 2015.

Symantec will continue to focus on security, while a new company will be established focusing on information management and will be called Veritas Technologies Corp.

Last month, the Wall Street Journal reported that Symantec was exploring a sale of the Veritas business as an alternative to a split-off.

SYMC closed Thursday at $25.90, up $0.58 or 2.29%, on a volume of 4.2 million shares. In after hours, the stock dropped $0.70 or 2.70% at $25.20.