{"id":10822,"date":"2012-04-25T01:56:37","date_gmt":"2012-04-24T23:56:37","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=10822"},"modified":"2012-04-25T10:21:47","modified_gmt":"2012-04-25T08:21:47","slug":"symantec-lowers-targets","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/software\/10822\/symantec-lowers-targets\/","title":{"rendered":"Symantec lowers targets"},"content":{"rendered":"

Software maker Symantec Corp<\/a> rattled investors on Tuesday with lower quarterly targets, raising concerns over sales execution and sending its shares down more than 11 percent.<\/p>\n

Symantec stock plunged 11.5 percent to $15.98 on Tuesday after closing at $18.07 on Monday.<\/p>\n

The company, best known for its Norton anti-virus product, is in the midst of shifting its business to a more predictable subscription-based model away from selling licenses.<\/p>\n

Symantec cited fewer large deals compared with the previous year as a reason for cutting its fourth quarter profit target to about 38 cents per share, down from its previous forecast of 41 cents to 42 cents per share.<\/p>\n

It said revenue would be lower at about $1.68 billion compared with its previous outlook of $1.72 billion to $1.73 billion.<\/p>\n

The news surprised investors as Symantec is due to report final earnings on May 2.<\/p>\n

“This is not what investors drinking their morning coffee wanted to see,” Daniel Ives of FBR Capital Markets & Co said.<\/p>\n

Symantec sells software and services that help consumers and businesses secure and manage their information and identities but also provides data back-up, recovery and storage.<\/p>\n

Aaron Schwartz of Jefferies said that Symantec’s storage business was the “primary area of weakness”.<\/p>\n

“It’s a lumpy business, there is more uncertainty quarter-on-quarter and the competition is difficult,” he added.<\/p>\n

Symantec catapulted itself to a top player with its purchase of Veritas, a data back-up and storage software company, in 2004 and it generated more than half of license revenue.<\/p>\n

“Approximately 60 percent of our license revenue typically comes from our storage and server management businesses,” Symantec Chief Executive Enrique Salem said on a call with analysts on Tuesday.<\/p>\n

“In the fourth quarter, large contracts from these businesses generated lower dollar values than expected,” he said, adding that “we definitely saw a tougher compare” because of the number of very large deals in March 2011.<\/p>\n

Lumpy performance<\/strong><\/p>\n

Some analysts questioned the company’s ability to execute, arguing Symantec had a history of choppy execution.<\/p>\n

“The company’s DNA has not been centered around consistency which continues to be an issue for investors,” Ives said.<\/p>\n

“We hope SYMC does not go back to former execution habits which saw lumpy performance historically,” Shaul Eyal, analyst at Oppenheimer equity research, said.<\/p>\n

“Valuation appears to be attractive but sales execution concerns are likely to put attractive valuation in the rear seat,” he added.<\/p>\n

In addition to lowered targets for the fourth quarter Symantec gave a weak outlook for its fiscal first quarter, which runs through June.<\/p>\n

The company said it expects revenue to be in a range of “down half a percent or up half a percent,” Chief Financial Officer James Beer said, adding that excluding items, he anticipated an EPS drop between 5 percent and 7.5 percent.<\/p>\n

Revenue in the first quarter is expected to decline 24 percent to 28 percent, but Beer predicted the company would achieve full-year revenue growth of 8.7 percent.<\/p>\n

“I still see health in the business going forward and my expectations are that we will see an increased number of transactions or deals that will go to the balance sheet,” Salem said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Software maker Symantec Corp rattled investors on Tuesday with lower quarterly targets, raising concerns over sales execution and sending its shares down more than 11 percent.<\/p>\n","protected":false},"author":7,"featured_media":5611,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[25,135,581],"class_list":["post-10822","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-software","tag-active","tag-earnings","tag-symantec"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/10822","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=10822"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/10822\/revisions"}],"predecessor-version":[{"id":10860,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/10822\/revisions\/10860"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/5611"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=10822"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=10822"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=10822"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}