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Symantec braces for economic downturn

Precautionary $7bn hit helps boost share price

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Symantec's operating profits beat Wall Street forecasts, but the firm still recorded a $6.8bn third quarter loss because of write-downs.

The company reported a third-quarter loss of $6.8bn compared to a profit of $132m in the same quarter last year. Sell fell slightly by 0.1 percent to $1.51bn in the the three months running up to 2 January 2009. It was pushed into the red after it took a $7bn charge, equivalent to two-thirds of the goodwill on its books.

Symantec's Veritas line of storage software can help in cost-saving server virtualisation projects, while its line of security software is seen as a necessary business expense even in tough economic times, up to a point. Deferment of e-commerce projects and the like is a factor that's likely to lead to a slowdown in enterprise sales of Symantec's security technology.

The security and compliance (enterprise security) segment of Symantec's business represented 26 percent of sales, but declined five percentage points year on year. By contrast the consumer security segment grew two percentage point to make up 29 per cent of the pie. Storage and server sales rose one percentage point to make up 37 per cent of revenues.

Unlike many technology firms, Symantec's sales expectations for the next three months were in line with analyst estimates at between $1.47bn and $1.52bn, helping its shares to rise three per cent on Wednesday to close at $14.63.

A statement on Symantec's results can be found here. ®

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