Feeds

Symantec blames deferrals for missing Q3 target

Analyst says there's more to it

Top 5 reasons to deploy VMware with Tegile

Symantec said its third-quarter revenue and profit fell below its forecast, as sales of data center management products failed to perform as expected.

Sales for the period that ended Dec. 29 were in the range of $1.29bn to $1.31bn, lower than a forecast of $1.315 bn to $1.345bn. Revenue was $1.149bn in the year ago period.

Net income was 10 cents to 11 cents a share, compared with a forecast of 14 cents to 15 cents per share and compared with eight cents per share last year.

Symantec shares fell more than 12 per cent in early afternoon trading.

The Silicon Valley company also forecast lower-than-expected results for the current quarter. Earnings before certain costs will be 18 cents to 20 cents on revenue of $1.25bn to 1.28bn, versus consensus estimates of 31 cents and sales of $1.4bn.

In addition to weaker than expected sales of products for the data center, the provider of security software to consumers and businesses blamed the shortfall on a higher proportion of enterprise maintenance contracts, which resulted in higher number of deferrals than expected, the company said.

Costs for the implementation of a new ERP system also increased more than expected.

Bear Stearns analyst John DiFucci said Symantec's problems likely are worse than the company indicated. For one, the revenue shortfall was likely a result of lower sales, as opposed to deferrals.

"Maintenance is very predictable, so we assume this essentially means there was a license shortfall," he wrote in a research note.

Another reason Symantec's business is worse off than it indicated is that consumer revenue, which helped contain the shortfall, is artificially inflated by about 13 per cent, according to DiFucci. Consumer sales, which account for about 30 per cent of Symantec's sales, are also likely to decline in future quarters, thanks to increased to free offerings being offered by ISPs, he added.

Symantec, along with McAfee, also faces a newer challenge as Microsoft adds new products to its portfolio. Both companies have complained to regulators about Microsoft's implementation of a kernel patch protection feature, designed to defend against rootkits, in an increasing number of its operating systems. They say it makes it difficult for them to plug in third-party anti-malware and intrusion prevention technologies. ®

Beginner's guide to SSL certificates

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
EMC, HP blockbuster 'merger' shocker comes a cropper
Stand down, FTC... you can put your feet up for a bit
Vodafone to buy 140 Phones 4u stores from stricken retailer
887 jobs 'preserved' in the process, says administrator PwC
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.