McAfee, Bullish on Security, Buys MX Logic

McAfee (NYSE:MFE) today announced increasing revenues, beating estimates, but declining profits. The company announced the acquisition of MX Logic, an aggressive, worldwide SaaS security provider, for $140 million.

McAfee said that MX Logic has 40,000 corporate customers with over four million end users and 1,800 channel partners.

“The acquisition of MX Logic will reinforce our position as a leader in Security-as-a-Service, and brings world-class email and Web defense, including archiving and business continuity services, extending our proven expertise in providing cloud-based services to our customers,” said Dave DeWalt, McAfee’s president and CEO in a statement announcing the deal.

For the second quarter ended June 30, the company reported GAAP net income was $28.7 million or $0.60 per share, beating estimates of $0.57 of 27 analysts polled by the Thomson Financial Network. However, that was down from $47.8 million during the same quarter a year ago, but revenue was $468.9 million, up from $396.8 million in Q2 2008.

In the quarter, business revenue grew 21 percent year-over-year to a record $291 million and the company signed 424 deals greater than $100,000 in value, including 28 deals greater than $1 million in value. On the consumer side, revenue grew 13 percent to $177 million, with 24 new or extended agreements and launched 63 new or enhanced online partnerships, bringing the total to over 200 brand name partners worldwide.

“In the general environment, we keep seeing that security is a high prioity. It’s nice where we are, as a dedicated security company,” said DeWalt during the conference call to discuss earnings.

“We’re seeing more threats: terrorism, warfare, and large scale criminal attacks. With President Obama saying this is a priority, it’s creating awareness.”

He added that compliance is boosting demand, as is a drive towards consolidation in the security industry.

“We got double digit growth out of every major segment,” he said. The company has been bullish in a variety of security areas, from endpoint security, where it expects to take on Cisco and Checkpoint, to SaaS, it has aggressive plans.

For the third quarter, McAfee expects net revenue of between $475 million to $495 million with non-GAAP net income of $0.58 to $0.62 per diluted share and $0.25 to $0.29 per diluted share of GAAP income.

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