Symantec Closes Fiscal Year With Record Revenue
Symantec Closes Fiscal Year 2004 With Record Revenue And Earnings Growth
Raises Fiscal Year 2005 Guidance
Symantec Corp. (Nasdaq: SYMC), the global leader in information security, today reported results for the fiscal fourth quarter and the fiscal year ended April 2, 2004. Symantec posted revenue for the quarter of $556 million, a 43 percent increase compared to $390 million for the same quarter last year. Revenue for fiscal year 2004 was $1.870 billion, a 33 percent increase compared to $1.407 billion for fiscal year 2003.
GAAP Results: Net income for the fiscal fourth quarter was $117 million, compared to $68 million for the same quarter last year. Earnings per share was $0.33, compared to earnings per share of $0.21 for the same quarter last year. For fiscal year 2004, Symantec reported net income of $371 million, compared to net income of $248 million for fiscal year 2003. Earnings per share was $1.07, compared to earnings per share of $0.77 for fiscal year 2003.
Non-GAAP Results: Non-GAAP net income for fiscal fourth quarter was $126 million, compared to $78 million for the same quarter last year. Non-GAAP earnings per share was $0.35, compared to earnings per share of $0.23 for the year-ago quarter. For fiscal year 2004, Symantec reported non-GAAP net income of $411 million, compared to $280 million in fiscal year 2003. Non-GAAP earnings per share was $1.18, compared to earnings per share of $0.86 for fiscal year 2003. Non-GAAP results and related reconciliation, as outlined in the attached consolidated statements, exclude expenses from the amortisation of other intangibles from acquisitions, acquired in-process research and development, restructuring charges, and patent settlement charges as well as related income tax benefits. See “Use of Non-GAAP Financial Information” below.
“We continue to execute on our vision of helping customers secure and manage their IT infrastructure, with last quarter’s performance capping off a tremendously successful year,” said John W. Thompson, Symantec chairman and CEO. “We are encouraged by the building momentum in the enterprise segment and, once again, the consumer segment turned in a stellar performance.”
Revenue Components For the quarter, Symantec’s worldwide enterprise business, including enterprise security, enterprise administration, and services represented 52 percent of total revenue and grew 29 percent year-over-year. Symantec’s enterprise security business represented 38 percent of total revenue and grew 30 percent; the enterprise administration business represented 12 percent of total revenue and grew 26 percent; and the services represented 2 percent of total revenue and grew 32 percent compared to the same quarter last year. Symantec’s consumer business represented 48 percent of total revenue and grew 62 percent year-over-year.
International revenues represented 53 percent of total revenue in the fourth quarter and grew 48 percent over the same quarter last year. Japan led the increase for the quarter with 66 percent growth, followed by Canada with 50 percent growth. The Europe, Middle East and Africa region recorded 48 percent growth, Asia Pacific recorded 36 percent growth and Latin America grew 12 percent. The United States grew 37 percent.
Symantec is raising forward-looking guidance for the fiscal first quarter ending July 2, 2004, as follows: Revenue is expected to be in the range of $525 to $555 million, an increase of $40 million from prior guidance. GAAP earnings per share is expected to be $0.30 at the midpoint of revenue guidance. Non-GAAP earnings per share is expected to be $0.33 at the midpoint of revenue guidance.
Symantec is raising forward-looking guidance for fiscal year 2005 ending April 1, 2005, as follows: Revenue is estimated at $2.335 billion, an increase of $160 million from prior guidance and a 25 percent increase over fiscal year 2004. At the guided annual revenue, the quarterly revenue estimates are as follows: Jun-04 $540 million; Sep-04 $565 million; Dec-04 $615 million; and Mar-05 $615 million. By business segment we are estimating the following revenue growth and mix for fiscal year 2005: Consumer Products 28% growth, 48% mix Enterprise Security 18% growth, 37% mix Enterprise Administration 34% growth, 13% mix Services 19% growth, 2% mix GAAP earnings per share is estimated at $1.37, a 28 percent increase over fiscal year 2004. Non-GAAP earnings per share is estimated at $1.46, a 24 percent increase over fiscal year 2004. Earnings per share by quarter is estimated to be as follows: GAAP Jun-04 $0.30; Sep-04 $0.32; Dec-04 $0.37; Mar-05 $0.38 Non-GAAP Jun-04 $0.33; Sep-04 $0.34; Dec-04 $0.39; Mar-05 $0.40
GAAP gross margin is forecasted to average 82.8 percent for the full year, with non-GAAP forecasted at 84.7 percent. GAAP operating income is estimated at $719 million or 31 percent of revenue for the full year, with non-GAAP estimated at $771 million or 33 percent of revenue. Common Stock Equivalents (CSE’s) are expected to grow by approximately 3 percent over the next year.
Non-GAAP forward-looking guidance for fiscal year 2005 excludes the pre-tax amortisation of other intangibles from previous acquisitions of approximately $13 million per quarter, or $52 million for the entire fiscal year.
Quarterly Highlights Symantec signed 264 contracts worldwide worth more than $100,000 each, including 70 worth more than $300,000 and 11 worth more than $1 million each, during the quarter.
Symantec signed new or extended agreements with customers including Knight Ridder, the nation’s second-largest newspaper publisher; The Guardian Life Insurance Company, the fourth largest mutual life insurance company in the United States; Fifth Third, a diversified financial services company; Hughes Supply, one of the nation’s largest diversified wholesale distributors; Flextronics, the leading Electronics Manufacturing Services provider focused on delivering operational services to technology companies; FrontBridge Technologies, the enterprise market leader for email security and message management services; MerckKGaA, an international leader in its core field of pharmaceuticals and chemicals based in Germany; Tata Consultancy Services, one of the world’s largest global software consulting and services organisations; Benic Solutions Corporation, a fully-owned subsidiary of Kawasaki Heavy Industries, Ltd. based in Japan, providing information system and IT management services for Kawasaki.
During the quarter, the company released the Symantec Gateway Security 300 Series appliance. This easy-to-use appliance delivers security and networking capabilities including firewall, intrusion prevention, intrusion detection, antivirus policy enforcement, content filtering and virtual private networking (VPN) functionality to provide small business secure high-speed access, reliable connectivity and ample bandwidth at an affordable price.
In addition, Symantec launched the Symantec Clientless VPN Gateway 4400 series. The new appliance line provides customers easy-to-manage, secure remote access to corporate networks, allowing enterprises to roll out secure remote access to meet business objectives and increase efficiency.
Symantec announced the new Symantec Managed Security Services Secure Internet Interface, which provides clients with greater visibility into their security posture and a deeper perspective on how to mitigate risks in the global threat landscape. It also provides enhanced device tracking and management, and expanded administration capabilities to help client organisations better enforce their security model through the Secure Internet Interface.
Symantec also introduced Enterprise Security Manager (ESM) for the Federal Information Security Management Act of 2002 (FISMA). Based on system security requirements of FISMA, Symantec ESM for FISMA provides specific, pre-configured security policies, which allow government agencies to audit their environments for compliance.