Symantec Delivers Upside Surprise
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Symantec (NASDAQ: SYMC) easily eclipsed analysts' expectations in its second quarter Wednesday even though its quarterly revenue slipped a little over 3 percent compared to the year-ago quarter.
For the quarter, the world's largest security software vendor earned $150 million, or $0.18 a share, up from $126 million and $0.15 a share in the year-ago period. Sales, however, regressed 3 percent to $1.47 billion.
On a non-GAAP basis, the Mountain View, Calif.-based company pocketed $294 million, $0.36 a share, easily topping analysts' consensus estimate of $0.33 a share and revenue of $1.43 billion, according to Thomson Reuters.
In addition to the healthy quarterly results, Symantec gave investors even more good news by announcing a $1 billion stock repurchase program.
"This action reflects the confidence we have in our cash flow generation and our ongoing commitment to increase shareholder value," CEO Enrique Salem said in a statement.
After closing off $0.43 a share, or 3 percent, in the regular trading session, investors snapped up the stock after hours, pushing it up $0.95, or 6 percent, to $16.68.
"Execution against our key priorities in a tight spending environment enabled us to achieve solid results," Salem said of the second-quarter results. "In particular, we were pleased with the strength in the consumer segment and with the initial progress in SMB security."
"We are encouraged by the signs of stabilization in the markets we serve and are confident that we will continue to see gradual improvement over the next few quarters," he added.
Along those lines, the company exited the quarter with $2.91 billion in deferred revenuewidely considered a key metric for any software companycompared to $2.72 billion in deferred revenue in the same period last year.
Cash flow from continuing operations was $226 million and it ended the quarter with more than $2.33 billion in cash and short-term investments.
For the third quarter, Symantec told investors to expect sales in the range of $1.48 billion and $1.51 billion on a GAAP basis and earnings-per-share in the neighborhood of $0.23 to $0.24 a share, slightly ahead of most analysts' expectations.
Nineteen of the 33 analysts covering the stock rate it either a "buy" or "strong buy" with the remainder maintaining a "hold" or "neutral" recommendation.