Symantec Reports Strong Second Quarter Earnings
Symantec Reports Strong Second Quarter Earnings Growth
Results Driven by Storage, High-Growth Areas and Continued Focus on Margin Expansion
Symantec Corp. (Nasdaq: SYMC) today reported the results of its second quarter of fiscal year 2009, ended October 3, 2008. GAAP revenue for the quarter was US$1.518 billion and non-GAAP revenue was $1.523 billion, up 6 percent over the comparable period a year ago. Foreign currency movements positively impacted non-GAAP revenue by approximately 3.5 percentage points year-over-
Results: GAAP operating margins for the second quarter were
14.3 percent. GAAP net income for the second quarter of
fiscal year 2009 was $140 million compared with $50 million
for the same quarter last year. GAAP diluted earnings per
share were $0.16 compared with earnings per share of $0.06
for the same quarter last year. GAAP deferred revenue at the
end of the quarter was $2.713 billion compared with $2.599
billion for the same quarter last year.
Cash flow from operating activities for the second quarter of fiscal year 2009 was $248 million compared with $331 million for the same quarter last year. This reduction was driven by increased cash tax payments versus the year ago period in which we received a tax refund, resulting in a year-over-year differential of more than $100 million.
Non-GAAP Results: Non-GAAP operating margins for the second quarter were 29.1 percent, up 390 basis points year-over-year. Non-GAAP net income for the second quarter of fiscal year 2009 was $311 million, up 18 percent compared with $263 million for the same quarter last year. Non-GAAP diluted earnings per share were $0.37, up 28 percent compared with earnings per share of $0.29 for the year ago quarter. Non-GAAP deferred revenue was $2.721 billion, up 4 percent compared with $2.624 billion at the end of the second quarter of fiscal year 2008. Foreign currency movements negatively impacted non-GAAP deferred revenue by 1 percentage point year-over-year and negatively impacted deferred revenue by 5 percentage points sequentially.
During the September 2008 quarter we repurchased 9.3 million shares, equivalent to $200 million. There is $600 million left in the current stock repurchase board authorisation.
“In the face of a slowing economic
environment around the world, Symantec continued to generate
growth in both our core business and in high growth areas
which are becoming increasingly important to our
customers,” said John W. Thompson, chairman and chief
executive officer, Symantec. “I am also quite pleased with
our continued operating margin expansion and earnings
growth, which is a result of our ongoing focus on managing
costs and expenses.”
Business Segment and Geographic Highlights
For the quarter, Symantec’s Storage and Server Management segment represented 38 percent of total non-GAAP revenue and grew 12 percent year-over-year. The Consumer business represented 29 percent of total non-GAAP revenue and grew 2 percent year-over-year. The Security and Compliance segment represented 26 percent of total non-GAAP revenue and grew 1 percent year-over-year. Services represented 7 percent of total non-GAAP revenue and grew 16 percent year-over-year.
International revenue represented 50 percent of total non-GAAP revenue in the second quarter of fiscal year 2009 and grew 5 percent year-over-year. The Europe, Middle East and Africa region represented 32 percent of total non-GAAP revenue for the quarter and grew 3 percent year-over-year. Revenue from the Asia Pacific/Japan region for the quarter represented 14 percent of total non-GAAP revenue and grew 11 percent year-over-year. The Americas, including the United States, Latin America and Canada, represented 54
Symantec signed 326 agreements worldwide versus 302 in the same period a year ago with a contract value of more than $300,000 each. Of the 326 agreements, 77 had a value of more than $1 million each versus 64 in the same period a year ago. In the second quarter of fiscal year 2009, 87 percent of the large transactions included multiple products.
Symantec signed new or extended agreements with customers including HealthEast Care System, the largest health care provider in the Twin Cities’ East Metro area; Flagstar Bank, a community bank with 175 banking centres in Michigan, Indiana and Georgia and 150 loan offices in 23 states; the United States Air Force, one of seven uniformed services of the United States; Consonus Technologies, a leading provider of IT infrastructure, data centre and managed services solutions; United States Forest Service; Horizon Blue Cross Blue Shield of New Jersey, the state’s largest health insurer; Northern Norway Regional Health Authority, which is responsible for public hospitals in northern Norway; Bundesagentur für Arbeit of Nuremberg, Germany; NTT DOCOMO, a leading Japanese mobile communications company; CBA/Commonwealth Bank, one of Australia’s leading providers of integrated financial services and Korea Exchange, a world-class Premier Exchange.
Fiscal Year 2009 Guidance
Guidance assumes an exchange rate of $1.25 per Euro for the December 2008 quarter versus the actual average rate of $1.45 per Euro and the end period rate of $1.47 per Euro for the December 2007 quarter.
For the third quarter of fiscal year 2009, ending January 2, 2009, GAAP revenue is estimated between $1.446 billion and $1.496 billion. GAAP diluted earnings per share are estimated between $0.11 and $0.14. GAAP deferred revenue is expected to be in the range of $2.696 billion and $2.821 billion.
Non-GAAP revenue for the quarter is estimated between $1.450 billion and $1.500 billion. Non-GAAP diluted earnings per share are estimated between $0.30 and $0.33. Non-GAAP deferred revenue is expected to be in the range of $2.700 billion and $2.825 billion.
Symantec is a global leader in providing security, storage and systems management solutions to help businesses and consumers secure and manage their information. Headquartered in Cupertino, California, Symantec has operations in more than 40 countries. More information is available at www.symantec.com.