NAI posts profit on revenue up 13%
Network Associates Inc has reported net income of $9m for its third quarter, ended September 30, on revenue up 13% at $232.2m, including revenue from its recently reacquired McAfee.com Inc subsidiary.
The Santa Clara, California-based security software and services vendor's net income compared with a net loss of $11.3m on revenue of $205.7m in the same quarter last year.
Excluding McAfee.com, of which NAI acquired the 25% it did not already own for $200m in September, the company reported net income of $26.9m on revenue of $211.2m, compared to net income of $8.5m on revenue of $189.5m in the same quarter last year.
For the nine months to date NAI recorded net income of $46m on revenue of $685.8m, including McAfee,com, compared to a net loss of $95.8m on revenue of $554.4m in the first three quarters of 2001.
Excluding the consumer-focused McAfee.com subsidiary, the company's net income to date is $63.4m on revenue of $625.4m, compared to a net loss of $14.5m on revenue of $511m in the first three quarters of last year.
NAI's CEO George Samenuk commented that the company had enjoyed a good quarter in a difficult economic climate, and also announced employee relocation and severance programs designed to reduce costs.
The company is moving 200 general and administrative staff from Santa Clara to Plano, Texas in January 2003, a move that it believes will save it $2m a year. NAI has also reduced its headcount by 100, or 2.5% in the last week.
With those cost savings in effect, combined with an estimated saving of $5m a year following the consolidation of McAfee.com, Samenuk said that the company is on track to increase its operating margin to 16% in 2003. The operating margin for the third quarter was 12%.
Looking ahead, the company's COO and CFO, Steve Richards, said he expects fourth-quarter net revenue to be between $252m and $257m, including McAfee.com, with revenue for the full calendar year expected to be between $1bn and $1.03bn.
In terms of new product developments, the company is expecting the first benefits of its August 2002 acquisition of Traxess Inc to be realized in the first half of the year with the delivery of the Infinistream network forensics technology, which will be capable of capturing network speed data in real time.
The company's partnership with intrusion-detection specialist Internet Security Systems Inc is also due to deliver a network intrusion detection product that combines ISS's RealSecure IDS software with NAI's Sniffer network monitoring software in the first quarter of 2003.