Symantec Boosts Earnings with Big Deals
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Symantec (NASDAQ:SYMC) is starting off its fiscal 2012 with a solid report.
Symantec reported its first quarter fiscal 2012 earnings late Wednesday, with first quarter revenue up year-over-year by 15 percent to $1.65 billion. Net Income was reported at $172 million up from $161 million for the first quarter of fiscal 2011.
Moving forward Symantec provided second quarter guidance for revenue to be in the range of $1.655 billion to $1.675 billion.
"Performance was driven by strength in Backup, Data Loss Prevention, Managed Security Services and Consumer, as well as ongoing stabilization of our Storage and Availability Management business," Enrique Salem, CEO and President of Symantec said during the company's earnings call. "In addition, our authentication business once again exceeded expectations and delivered its fourth consecutive quarter of better-than-expected results."
A good part of Symantec's strong quarter came from cross-selling and large deals.
"During the June quarter, 48 percent of our deals over $1 million included sales from both our security and compliance and storage and server management segments, as compared to 26 percent for the year-ago period," Salem said.
Looking at the sales numbers, Symantec had 281 deals valued at more than $300,000 each and 57 of those deals were valued at more than $1 million.
Salem explained that the big deal cross-selling is all about better execution by Symantec's sales team.
"If you look at it, the team was very focused on getting a fast start to the year and it was everything from getting quotas out sooner to how do we make sure that we look at better account planning, how do we do better deal reviews, executive engagement," Salem said. "And I just think our sales team is executing better than we've seen in probably 5 to 10 years here at Symantec."
Drilling down further Salem noted that Symantec's storage and availability management business performed well, thanks in part to Linux.
"We're pleased with the success we're having with our partnership with Red Hat as we help organizations migrate to Linux," Salem said.
On the security front, Symantec is integrating the VeriSign SSL certificate business at solid pace. The former VeriSign Security Business generated $74 of revenue for Symantec during the quarter. Symantec acquired VeriSign's SSL business for $12.8 billion in 2010.
Salem also noted that Symantec has benefitted from the acquisition of rival security vendor McAfee. Intel acquired McAfee for $7.7 billion in 2010.
"With regards to the competitive environment, clearly we've got a distracted competitor," Salem said. "I mean, you're integrating what was a focused security company into a much larger semiconductor company, more diversified portfolio and so that's a benefit to us and we're clearly seeing some displacements."