Symantec Misses Wall Street Expectations for Fiscal 4Q15
Symantec Continues to Disappoint Investors in Fiscal 2015
Fiscal 4Q15 and fiscal 2015 results
On May 14, 2015, Symantec (SYMC) declared its fiscal 4Q15 and fiscal 2015 earnings results. It missed 4Q15 earnings estimates, and shareholders suffered as the share price went down ~3.5%.
Symantec’s non-GAAP (generally accepted accounting principles) revenue was $1.55 billion, and non-GAAP EPS (earnings per share) was $0.43. They fell marginally short of consensus estimates of $1.56 billion and $0.44, respectively. On a year-over-year basis, revenues and EPS registered a decline of 7% and 10%, respectively.
For fiscal 2015, Symantec reported revenues and EPS of $6.508 billion and $1.88 per share, respectively. On a year-over-year basis, fiscal 2015 revenues and EPS registered a decline of 3% and 4%, respectively.
Symantec’s earnings and revenue outlook for 1Q16 also sent SYMC shares down. This outlook was lower than analysts’ estimate.
Operating performance
In 2Q15, after Symantec decided to split into two companies, the company changed its reporting structure. As you can see in the above chart, Symantec’s Information Management segment contributes the most to the company’s overall revenues. It’s followed by Enterprise Security and Consumer Security.
To know more about Symantec’s breakup, read Market Realist’s article Why Symantec split up into two companies.
Of all the reporting segments, Information Management’s, or Veritas’s, non- GAAP revenues registered a meager growth of 1% on a year-over-year basis in fiscal 2015. Consumer Security and Enterprise Security registered a decline of 7% and 2%, respectively, in fiscal 2015.
Symantec’s management said the company’s decision to sell off Veritas, its data storage business, is on schedule. The company announced the separation of Veritas on April 10, 2015. According to a Wall Street Journal report, Symantec has met with officials from NetApp (NTAP) and EMC (EMC) as well as some private equity firms to ascertain interest in Veritas. Veritas’s legal separation is due on January 2, 2016, which is bound to create interest among investors.
Symantec also intends to break off its Information Management segment into a separate company by October 2015.
If you are bullish about Symantec, you could invest in the PowerShares QQQ Trust ETF (QQQ) and the Technology Select Sector SPDR Fund (XLK) to gain exposure to Symantec. QQQ and XLK invest about 0.32% and 0.41% of their holdings in Symantec.
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