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Symantec 2Q earnings beat Street; shares rise

Wed, 10/27/2010 - 6:05pm
The Associated Press

MOUNTAIN VIEW, Calif. (AP) — Symantec Corp. said Wednesday its fiscal second-quarter net income dropped 12 percent partially because of the security software maker's recent purchase of VeriSign Inc.'s security business, but results topped Wall Street's estimates.

Shares rose 85 cents, or 5.4 percent, to $16.65 in after-hours trading, after closing down 9 cents at $15.80.

The company's net income in the three months ended Oct. 1 fell to $136 million, or 17 cents per share, from $155 million, or 19 cents per share, a year earlier.

Adjusted for items such as stock-based compensation, restructuring costs and amortization of intangible assets, adjusted earnings came to 34 cents per share.

Revenue was relatively flat at $1.48 billion, compared to $1.47 billion a year ago. If not for currency fluctuations, revenue would have risen 2 percent.

Analysts polled by Thomson Reuters expected earnings of 28 cents per share on revenue of $1.46 billion.

The company said it had expected its purchase of the VeriSign assets, along with PGP Corp. and GuardianEdge Technologies Inc., to hurt earnings by 4 cents per share in the quarter, partly because of accounting adjustments, but the acquisitions only reduced earnings by 3 cents per share.

Symantec also said it had to pay a one-time fee of $10 million to make amends with customers who were not receiving their subscriptions to Symantec's software in a timely fashion.

For the third quarter, Symantec forecast adjusted earnings per share between 32 cents and 33 cents per share on revenue between $1.57 billion and $1.59 billion. Analysts project adjusted earnings of 32 cents per share on revenue of $1.56 billion.

Software sales to consumers remains one the company's key businesses, accounting for 32 percent of its total revenue in the latest quarter.

The division of Symantec's business that helps large businesses comply with security regulations also grew, with revenue expanding 5 percent since last year.

Other areas of Symantec's business, including its services, server management and European, African and Middle Eastern divisions generated less revenue than they did at time last year. Revenue gains in the Americas, including the U.S., Latin America and Canada, as well as Asia, helped keep revenue afloat overall.

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