Symantec shares sink on weak 1Q forecast

Symantec beats expectations in 4Q but shares sink on weak revenue forecast

Associated Press

Symantec Corp.'s shares fell Wednesday after the computer security company issued a weak revenue forecast for its fiscal first quarter.

THE SPARK: Symantec said late Tuesday that restructuring costs, impairment charges and other special items weighed on its fourth-quarter performance but its results beat expectations on an adjusted basis.

Its net income fell 66 percent to $188 million, or 26 cents per share, for the period from $559 million, or 76 cents per share, in the fourth quarter last year. It earned 44 cents per share excluding one-time items, up from 38 cents per share last year. Revenue increased 4 percent to $1.75 billion.

Analysts were anticipating earnings of 38 cents per share on revenue of $1.73 billion.

However, the company said on a conference call that it expects its revenue for the current quarter to come in between $1.61 billion and $1.65 billion due to pressure from the weak yen. Analysts were anticipating revenue of $1.67 billion.

THE BIG PICTURE: Symantec recently launched a reorganization that included cutting executive and middle-management jobs to make the company more nimble and able to adapt to customer needs. The company said that this streamlining, as well as a reallocation of its resources to focus on its most promising products, should deliver improved performance this fiscal year.

THE ANALYSIS: While shares fell, Cowen & Co. analyst Gregg Moskowitz reiterated his "Outperform" rating on the company's shares, saying that concerns about the first-quarter forecast are overdone.

The analyst said he recognizes the near-term transition from the restructuring, and the substantial yen depreciation but said he believes the outlook may be somewhat conservative. And more importantly, he remains confident in the company's longer-term prospects.

SHARE ACTION: Shares fell 82 cents, more than 3 percent, to $24.28 by midmorning. The stock, however, has been climbing all year, so the drop still left Symantec at the upper end of its 52-week trading range of $13.06 to $25.

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