Symantec: Trusted Brand to Protect the Net
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Yesterday, while checking my e-mail, I got an alert that notified me that an email had a virus (no, it wasn't an internet.com reader). Of course, I was able to easily clean-up the problem. It required two clicks of my mouse.
As shown by the recent hacks of Yahoo!, eBay and Amazon.com, Internet security is a major issue indeed. And a source of profits for a variety of companies. A company that is at the forefront of Net security is Symantec (SYMC) . Yes, it was this company's software that alerted me to my menacing virus.
Symantec has taken a merger-and-acquisitions strategy to form its core operations. One of its earlier buys was for Norton, named after the well-known software developer Peter Norton. His company was a pioneer in maximizing the potential of a PC. Even though Peter has since retired, his omnipresent image has not. His reassuring face has become somewhat like the Good House Keeping seal of approval for high-tech.
However, Symantec has had a volatile past. Part of this has been the result of many acquisitions and the difficulties of integration. But lately, the company has been roaring back. Then again, Symantec has a new CEO to energize the company. His name is John Thompson, who had spent 28 years with IBM. He was the general manager for the Americas division, which had $37 billion in revenues and 30,000 employees.
As for the company's financials, they have been a model of consistency. In the latest quarter, the company had $201 million in revenues, which represented a 29 percent increase from the same period a year ago. In fact, it was the fifth-consecutive quarter of record earnings. Net income (before amortization of goodwill and one-time charges) was $37 million, which was up from $25 million the same period a year ago.
The company has also been re-focusing itself. To this end, Symantec divested its ACT! and Visual Cafe product lines. Rather, the company is focusing on the enterprise market -- with an emphasis on security. For example, enterprise license revenue grew by 40 percent year-over-year. About 46 percent of revenues come from this market segment.
Moreover, to implement complex enterprise security solutions requires a strong professional services force. Recently, Symantec purchased the security consulting arm of L-3 Communications.
As the Web gets bigger and bigger, so will the demand for security solutions. For years, Symantec has been a leader in the field and will continue to do so. It has become a trusted brand, which companies will pay for - and recently, so have investors.
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