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McAfee, Symantec Top Earnings Forecasts

ForMcAfee.com and Symantec Corp. , two California-based leaders providing Internet security software, heightened security on the Web has resulted in better than expected revenues for both firms.

For the fourth quarter and fiscal year ended December 31, 2001, McAfee reports revenues for of $18.6 million up $6.5 million from the same period last year, representing year-over-year revenue growth of 54 percent.

Fourth quarter revenues increased sequentially 15 percent over third quarter revenues of $16.2 million. Pro-forma net income for the quarter, excluding non-cash charges related to stock-based compensation and the amortization of intangibles, was $4.2 million or $0.09 per share. Net income for the quarter, including such non-cash charges was $904,000 or $0.02 per share.

Revenue for fiscal year 2001 was $62 million, as compared to $46.9 million a year ago, representing annual revenue growth of 32 percent. Pro-forma net income, excluding non-cash charges related to stock-based compensation and the amortization of intangibles, was $6.8 million or $0.14 per share. Net loss for the year, including such non-cash charges was $854,000 or a loss of $0.02 per share.

"This has been a terrific year for everyone at McAfee.com," said Srivats Sampath, president and chief executive officer, McAfee.com. "We delivered on our commitments and continue to prove our standing as a leader in providing managed security services to consumers and small to medium-sized businesses," he adds.

Fourth quarter highlights include:

  • Total unique paid subscribers surpassed 1,345,000 million during the quarter. New subscribers acquired during the period exceeded 125,000. The Company also experienced a renewal rate of approximately 85 percent for its premium security services. The Company's average sale per subscriber was $28.50.

  • As of December 31, 2001, the Company had over 1,590,000 active paid subscriptions to various McAfee.com services demonstrating a continued push to sell more services to its current subscriber base.

  • McAfee.com for Business, which provides managed security services for the SME market continues to gain traction with the acquisition of over 1,400 new customers.
Among the firms new services and products include:

  • The release of the next-generation of the McAfee.com Personal Firewall, incorporating advanced intrusion detection and a graphical intruder trace utility.

  • The launch of VirusScan Online for Windows XP fully integrates Microsoft .NET technologies such as Alerts, Passport and other XML based Web services.

The firm says its new product introduction favorably affected revenue by approximately $1.6 million due to the introduction of a new retail boxed version of VirusScan 6.0 by Network Associates , which included the introduction of post-contract customer support (PCS) at $4.95 per year.

Yesterday, Symantec posted revenue for the fiscal third quarter 2002, ended Dec. 28, 2001 of $290.2 million, as compared to $241.8 million for the same quarter last year.

Net income before one-time charges and the amortization of acquisition-related charges, primarily from the AXENT acquisition, for the fiscal third quarter was $59.4 million, compared to $40.4 million from the same quarter last year.

Earnings per share before one-time charges and the amortization of acquisition related charges for the fiscal third quarter was $0.78, compared to earnings per share of $0.52 for the year ago quarter. All figures include historical results of operations from the acquired AXENT Technologies.

Including one-time charges and the amortization of goodwill and all other acquisition related expenses, Symantec reported earnings per share at break even $0.00, compared to a net income per share of $0.21 for the same quarter last year.

"During these times of complex threats and heightened awareness for security, the performance of our enterprise business underlines the strength of our technology and the breadth of our product portfolio,'" said John W. Thompson, Symantec chairman and CEO.

"In addition, our consumer business performed exceedingly well with a record 5.3 million packaged products shipped during the third quarter, nearly 2 million more than has ever shipped in one quarter."

Symantec's worldwide enterprise solutions, comprised of both security and enterprise administration products, accounted for 60 percent of total sales. The enterprise security business performed solidly, representing 44 percent of total sales with growth of 44 percent over the same quarter last year.

Symantec's consumer business grew 20 percent over the comparable period last year. International revenues comprised 43 percent of total revenues, led by 21 percent growth in the Europe Middle East Africa region compared to the same quarter last year.

Quarterly highlights include:

  • Symantec's enterprise success is shown by its signing of a record 119 deals worth more than $100,000, including 31 deals worth more than $300,000, during the quarter.

  • Several Fortune 1000 customers have selected Symantec to manage their network security operations including Aetna; American President's Line, a global logistics and transportation company and Blue Cross/Blue Shield of Louisiana.

  • Symantec's total antivirus product sales increased 53 percent during the quarter as compared to the year ago quarter. Sales of the company's intrusion detection solutions increased 39 percent from the same quarter a year ago. Vulnerability management solutions grew 11 percent sequentially.

  • In October, Symantec introduced the Symantec Firewall/VPN 100, 200 and 200R series, expanding its family of security firewall appliances. Designed for the small office it provides firewall protection and a secure VPN connection between locations in a company.

  • In addition, Symantec launched the latest version of Enterprise Security Manager, a vulnerability management solution that automates planning, supervision and monitoring of security policies from a single location. It performs more than 2,000 security and vulnerability checks on a variety of operating systems, including Windows NT/2000/XP, Solaris, HP, Linux and IBM iSeries .

  • According to the Gartner Dataquest report, '2000 Security Software Market Share' Symantec moved from the number four position to the number one spot, holding 14.7 percent of the security software market.