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Symantec hit by massive goodwill impairment

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Symantec announced moderately satisfying but recession-hit numbers for the full fiscal 2009 year, with the final quarter showing a revenue drop. A massive goodwill impairment charge of $7.4bn blew an enormous, non-cash hole into net income numbers for the full year and its final quarter.

Fourth quarter fiscal 2009 revenues were $1.47bn, a 4 percent drop from the year-ago quarter's $1.54bn.

Net income was a loss of $249m, quite a turnaround from the year-ago quarter's profit of $186m. This net loss included taking into account a non-cash goodwill impairment charge of $413m. This finalised a goodwill impairment analysis that began in the previous quarter.

Discounting the goodwill impairment, net income would have been $164m, an 11.8 percent decrease, with net income falling faster than revenues for the quarter.

Full year 2009 revenue was $6.15bn, a 4.2 percent increase compared to fy08's $5.9bn.

The net loss figures are staggering: the net loss was $6.7bn compared with net income of $464m for 2008.

It's important to note that this net loss includes a non-cash goodwill impairment charge of $7.4bn. Without that, net income would have been $700m, a 66 percent increase, which would have been very satisfying.

The company's statement was one of the strong-performance-but-for-recession type ones, with CFO James Beer saying: “Our continued focus on cost management enabled us to deliver better than expected earnings per share. In the midst of a challenging economic environment we delivered strong cash flow from operations, generating more than $1bn during the last two quarters.”

Within the overall results and using non-GAAP numbers, Symantec’s Storage and Server Management segment represented 36 percent of revenue and declined 4 percent year-over-year

The Consumer business, 30 percent of revenue, declined 1 percent year-over-year, holding up better. The Security and Compliance segment, 25 percent of revenue, declined 14 percent year-over-year. Services represented 9 percent of revenue and grew 27 percent year-over-year. That's the way to go.

Geographically EMEA stood out, as it, representing 30 percent of revenue, declined 13 percent year-on-year. The larger Americas region (55 percent) declined just 1 percent, as did Asia-Pacific. Possibly Symantec's EMEA boss is feeling somewhat pressured.

The forecast is for Q1fy10 revenue of $1.44bn - $1.5bn, and $0.09 - $0.11/share earnings.

All numbers are GAAP by the way, unless stated otherwise, and no currency changes have been taken into account. ®

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