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McAfee looks ahead after mediocre Q4

Targets growth after selling units

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Security firm McAfee yesterday reported reduced fourth quarter revenues but predicted rosier times ahead following its decision to sell off two flagging division last year. For the quarter ending 31 December 2004, McAfee reported revenues of $244m down from $272m in Q4 2003. Pre-tax quarterly earnings came out at $24m (the firm is still assessing its tax bill) while Q4 2004 operating profit fell to $38m from $50m in the same quarter last year.

McAfee expects that the filing of its 2004 Form 10-K will be delayed beyond the mid-March 2005 deadline to the end of March while it sorts out "internal control deficiencies" that have left it unable to report as scheduled.

For the full financial year, McAfee reported revenues of $911m and pre-tax earnings of $317m. McAfee IntruShield intrusion prevention appliances were a star performer with revenue growth of 55 per cent year over year. McAfee's consumer anti-virus business also did well though this revenue stream is threatened by Microsoft's decision to enter the market later this year.

Looking ahead, McAfee said it expected to book sales of between $920m to $960m in FY 2005, compared to analyst estimates of around $860m. McAfee's net earnings per share are expected to be between $1.10 and $1.15 per share, up between $0.05 and $0.10 on previous predictions. McAfee's shares were trading at $23.39 Friday, down from around $25 Thursday. ®

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