April 28, 2004 2:59 PM PDT

Viruses breed profits for Symantec

Symantec announced its profits rose sharply in its fourth quarter amid stronger-than-expected sales of its antivirus software, slightly beating analyst forecasts.

On Wednesday, the security software company reported a net profit of $117 million, or 35 cents a share, for the quarter ended April 2. That compares with $68 million, or 21 cents a share, a year ago. Analysts on average had expected Symantec to post a net profit of 34 cents a share, according to research firm Thomson First Call.


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Revenue, meanwhile, climbed to $556 million in the fourth quarter, up 43 percent from a year ago and better than Wall Street expectations of $526.1 million.

"We are encouraged by the building momentum in the enterprise segment and, once again, the consumer segment turned in a stellar performance," Symantec CEO John Thompson said in a statement.

Symantec's consumer business performed well, generating $267 million in revenue during the quarter--a 62 percent increase over the previous year. The segment contributed 48 percent of Symantec's total revenue. Some analysts had expected the consumer business to bring in only $260 million.

The strong consumer performance overshadows Symantec's earlier efforts to shift its focus more to enterprise business.

During the fourth quarter, Symantec's enterprise security business generated approximately $211.3 million in sales, up 30 percent from a year earlier. Those corporate sales made up 38 percent of the company's total revenue in the quarter.

Symantec also announced its fiscal year 2004 earnings. Consumer sales reached roughly $870 million, while enterprise security products brought in about $740 million. Those numbers gave the consumer business the largest slice of the revenue pie. It displaced the enterprise security business, which had led for two consecutive years.

The company has worked hard to focus its operations on the more stable and lucrative enterprise segment, but each time a major bout of viruses sweeps through computer networks, the company finds itself again serving a large contingent of consumers, according to analysts.

"We continue to execute on our vision of helping customers secure and manage their IT infrastructure, with last quarter's performance capping off a tremendously successful year," Thompson said in his statement.

The company raised its first-quarter 2005 forecast to revenue of $525 million to $555 million--a $40 million increase on its previous guidance. It expects earnings of 30 cents a share.

Symantec also forecast that consumer sales will still lead in revenue in fiscal 2005, with a 48 percent slice. Enterprise security will account for 37 percent.

Symantec's shares fell in after hours trading to $46.05 a share, compared with a closing price of $47.11 during the regular trading session.

 

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