SYMANTEC REPORTS RECORD QUARTER WITH 31 PERCENT REVENUE GROWTH
Announcement posted by Symantec (Consumer) 22 Jan 2004
Raises Fiscal Year Guidance
Symantec Corp. (Nasdaq:SYMC), the world leader in Internet security, today reported results for the fiscal third quarter ended Jan. 2, 2004. Symantec posted revenue for the quarter of $494 million, a 31 per cent increase compared to US$376 million for the same quarter last year, driven by solid enterprise security revenues and stronger than expected consumer results.
GAAP Results: Net income for the fiscal third quarter was $111 million, compared to $72 million for the same quarter last year. Earnings per share was $0.32, compared to earnings per share of $0.22 for the year-ago quarter.
Non-GAAP Results: Non-GAAP net income for the fiscal third quarter was $120 million, compared to $77 million for the same quarter last year. Non-GAAP earnings per share was $0.34, compared to earnings per share of $0.24 for the year-ago quarter. Non-GAAP results and related reconciliation, as outlined in the attached consolidated statements, exclude expenses from the amortization of other intangibles from acquisitions, acquired in-process research and development, and restructuring charges as well as related income tax benefits. See Use of Non-GAAP Financial Information below.
We closed a record number of large enterprise deals during the quarter and the consumer segment turned in a phenomenal performance, said John W. Thompson, Symantec chairman and CEO. Our focus on helping customers secure and manage their IT infrastructure continues to gain traction as more and more customers turn to Symantec to solve the challenge of managing their complex environments.
Revenue Components
For the quarter, Symantecs worldwide enterprise business, including enterprise security, enterprise administration, and services, represented 51 per cent of total revenue. Symantecs enterprise security business represented 38 per cent of total revenue and grew 17 per cent year-over-year; the enterprise administration business represented 11 per cent of revenues and grew 2 per cent compared to the same quarter last year; and the services business grew 42 per cent and represented 2 per cent of total revenue. Symantecs consumer business grew 55 per cent and represented 49 per cent of total revenue.
International revenues represented 54 per cent of total revenue in the third quarter and grew 40 per cent over the same quarter last year. Canada led the increase for the quarter with 47 per cent growth, followed by the Europe, Middle East and Africa region with 45 per cent growth. Japan recorded 36 per cent year-over-year growth, Asia Pacific recorded 24 per cent growth and Latin America grew by 11 per cent. The United States grew 22 per cent.
Business Outlook
Forward-looking guidance for the fiscal fourth quarter ending April 2, 2004, is as follows:
Revenue is expected to be in the range of $500 to $520 million.
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 $0.32 at the midpoint of revenue guidance.
Forward-looking guidance for the fiscal year, ending April 2, 2004, updated to reflect the fiscal year-to-date actual performance and estimated results for the fiscal fourth quarter is as follows:
Revenue is expected to be approximately $1.82 billion.
GAAP earnings per share is expected to be $1.03 at the stated revenue forecast, up 8 cents from our previous guidance of $0.95 per share.
Non-GAAP earning per share is expected to be $1.14 at the stated revenue forecast, up 9 cents from previous guidance of $1.05 per share.
Non-GAAP earnings per share excludes the pre-tax amortization of other intangibles from acquisitions, acquired in-process research and development, and other items such as patent settlement and restructuring charges of approximately $11 million and $59 million for the quarter ending April 2, 2004, and the fiscal year ending April 2, 2004.
Symantec is initiating forward-looking guidance for fiscal year 2005 ending April 1, 2005. It should be noted that the outlook does include forecasted results from our announced acquisition of ON Technology, which is expected to close in mid-February. In addition, our outlook assumes no significant changes in the current economic or competitive climates over the course of the next 15 months as compared to what we are experiencing today. Guidance is as follows:
Revenue is estimated to be in the range of $2.15 to $2.20 billion. Symantec expects about 47 per cent of the revenue to occur in the first half of the fiscal year.
GAAP earnings per share is expected to be $1.21 at the midpoint of the stated revenue forecast.
Non-GAAP earnings per share is expected to be $1.31 at the midpoint of the stated revenue forecast.
Gross margin is forecasted to average 84.7 per cent for the full year.
Operating income as a percent of revenue is estimated at 32 per cent for the full year.
Common Stock Equivalents (CSEs) are expected to grow by less than 2 per cent over the next year.
Non-GAAP earnings per share excludes the pre-tax amortization of other intangibles from acquisitions, acquired in-process research and development, and other items such as restructuring charges of approximately $45 million for the fiscal year ending April 1, 2005.
Quarterly Highlights
Symantec signed 278 contracts worldwide worth more than $100,000 each, including 87 worth more than $300,000 and 13 worth more than $1 million each, during the quarter.
Symantec signed new or extended agreements with customers including the U.S. Air Force; H&R Block Inc.; CIGNA Corporation, one of the largest investor-owned employee benefits organisations in the United States; Nicor Gas Company, one of the nation's largest gas distribution companies; Graybar Electric Company Inc., the nations leading distributor of communications and electrical products and related supply chain management and logistics services; PNC Financial Services Group Inc.; UnumProvident Corporation, the largest provider of group and individual disability income protection insurance in the United States and United Kingdom; Spherion Corporation, a provider of recruitment, technology, and outsourcing services; Hercules Incorporated, a global manufacturer of chemical specialties used in making a variety of products for home, office, and industrial markets; Zurich Financial Services; and Development Bank of Singapore, the largest bank in Singapore.
During the quarter, Symantec released Symantec Enterprise Security Manager (ESM) 6.0, an industry-leading policy compliance solution. With outstanding performance and scalability, Symantec ESM provides centralised, automated and comprehensive security analysis of organisations critical business applications and operating systems.
Symantec announced an enhanced iForceTM Intrusion Detection (IDS) Appliance, powered by Sun and Symantec. A complete high-speed network intrusion detection appliance, the solution combines Symantec ManHunt 3.0 with Suns Fire V60x server and provides flexible deployment options by monitoring up to 2 gigabits per second.
In addition, Symantec announced its client compliancy initiative designed to promote the enforcement of remote and mobile client security policies. As part of the initiative Symantec introduced its new client compliancy application program interface (API), which provides IT Administrators the ability to block access to an organisations network when a computers security level does not meet the requirements defined by the organisations security policies.
About Symantec
Symantec, the world leader in Internet security technology, provides a broad range of content and network security software and appliance solutions to individuals, enterprises and service providers. The company is a leading provider of client, gateway and server security solutions for virus protection, firewall and virtual private network, vulnerability management, intrusion detection, Internet content and e-mail filtering, remote management technologies and security services to enterprises and service providers around the world. Symantecs Norton brand of consumer security products is a leader in worldwide retail sales and industry awards. Headquartered in Cupertino, Calif., Symantec has worldwide operations in 37 countries. For more information, please visit www.symantec.com.au.
NOTE TO EDITORS: If you would like additional information on Symantec Corporation and its products, please view the Symantec Press Centre at http://www.symantec.com/PressCenter/ on Symantec's Web site. All prices noted are in US dollars and are valid only in the United States.
Symantec and the Symantec logo are trademarks or registered trademarks, in the United States and certain other countries, of Symantec Corporation. Additional company and product names may be trademarks or registered trademarks of the individual companies and are respectfully acknowledged.
FORWARD LOOKING STATEMENT: This press release contains forward-looking statements, including forecasts of future revenue and earnings per share, expected activities, and other financial and business results that involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by this press release. Such risk factors include, among others: the sustainability of recent growth rates, particularly in consumer products; the anticipation of the growth of certain market segments, particularly enterprise security; the positioning of Symantec's products in those segments; the competitive environment in the software industry; general market conditions, fluctuations in currency exchange rates, changes to operating systems and product strategy by vendors of operating systems; and whether Symantec can successfully develop new products and the degree to which these gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. Additional information concerning these and other risk factors is contained in the Risk Factors sections of Symantecs previously filed Form 10-K and Form 10-Q. Symantec assumes no obligation to update any forward-looking information contained in this press release except as otherwise required by law.
USE OF NON-GAAP FINANCIAL INFORMATION: In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Symantec reports non-GAAP financial results. Non-GAAP net income and earnings per share exclude acquisition related charges, such as amortization of other intangibles and in-process research and development, and certain other identified charges, such as restructuring and patent settlement, as well as the tax effect of these items. Symantec's management believes these non-GAAP measures are useful to investors because they provide supplemental information that facilitates comparisons to prior periods. Management uses these non-GAAP measures to evaluate its financial results, develop budgets and manage expenditures. The method Symantec uses to produce non-GAAP results is not computed according to GAAP, is likely to differ from the methods used by other companies and should not be regarded as a replacement for corresponding GAAP measures. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which is attached to this release and can be found on the investor relations Web site at www.symantec.com/invest/center.html <http://www.symantec.com/invest/center.html>
GAAP Results: Net income for the fiscal third quarter was $111 million, compared to $72 million for the same quarter last year. Earnings per share was $0.32, compared to earnings per share of $0.22 for the year-ago quarter.
Non-GAAP Results: Non-GAAP net income for the fiscal third quarter was $120 million, compared to $77 million for the same quarter last year. Non-GAAP earnings per share was $0.34, compared to earnings per share of $0.24 for the year-ago quarter. Non-GAAP results and related reconciliation, as outlined in the attached consolidated statements, exclude expenses from the amortization of other intangibles from acquisitions, acquired in-process research and development, and restructuring charges as well as related income tax benefits. See Use of Non-GAAP Financial Information below.
We closed a record number of large enterprise deals during the quarter and the consumer segment turned in a phenomenal performance, said John W. Thompson, Symantec chairman and CEO. Our focus on helping customers secure and manage their IT infrastructure continues to gain traction as more and more customers turn to Symantec to solve the challenge of managing their complex environments.
Revenue Components
For the quarter, Symantecs worldwide enterprise business, including enterprise security, enterprise administration, and services, represented 51 per cent of total revenue. Symantecs enterprise security business represented 38 per cent of total revenue and grew 17 per cent year-over-year; the enterprise administration business represented 11 per cent of revenues and grew 2 per cent compared to the same quarter last year; and the services business grew 42 per cent and represented 2 per cent of total revenue. Symantecs consumer business grew 55 per cent and represented 49 per cent of total revenue.
International revenues represented 54 per cent of total revenue in the third quarter and grew 40 per cent over the same quarter last year. Canada led the increase for the quarter with 47 per cent growth, followed by the Europe, Middle East and Africa region with 45 per cent growth. Japan recorded 36 per cent year-over-year growth, Asia Pacific recorded 24 per cent growth and Latin America grew by 11 per cent. The United States grew 22 per cent.
Business Outlook
Forward-looking guidance for the fiscal fourth quarter ending April 2, 2004, is as follows:
Revenue is expected to be in the range of $500 to $520 million.
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 $0.32 at the midpoint of revenue guidance.
Forward-looking guidance for the fiscal year, ending April 2, 2004, updated to reflect the fiscal year-to-date actual performance and estimated results for the fiscal fourth quarter is as follows:
Revenue is expected to be approximately $1.82 billion.
GAAP earnings per share is expected to be $1.03 at the stated revenue forecast, up 8 cents from our previous guidance of $0.95 per share.
Non-GAAP earning per share is expected to be $1.14 at the stated revenue forecast, up 9 cents from previous guidance of $1.05 per share.
Non-GAAP earnings per share excludes the pre-tax amortization of other intangibles from acquisitions, acquired in-process research and development, and other items such as patent settlement and restructuring charges of approximately $11 million and $59 million for the quarter ending April 2, 2004, and the fiscal year ending April 2, 2004.
Symantec is initiating forward-looking guidance for fiscal year 2005 ending April 1, 2005. It should be noted that the outlook does include forecasted results from our announced acquisition of ON Technology, which is expected to close in mid-February. In addition, our outlook assumes no significant changes in the current economic or competitive climates over the course of the next 15 months as compared to what we are experiencing today. Guidance is as follows:
Revenue is estimated to be in the range of $2.15 to $2.20 billion. Symantec expects about 47 per cent of the revenue to occur in the first half of the fiscal year.
GAAP earnings per share is expected to be $1.21 at the midpoint of the stated revenue forecast.
Non-GAAP earnings per share is expected to be $1.31 at the midpoint of the stated revenue forecast.
Gross margin is forecasted to average 84.7 per cent for the full year.
Operating income as a percent of revenue is estimated at 32 per cent for the full year.
Common Stock Equivalents (CSEs) are expected to grow by less than 2 per cent over the next year.
Non-GAAP earnings per share excludes the pre-tax amortization of other intangibles from acquisitions, acquired in-process research and development, and other items such as restructuring charges of approximately $45 million for the fiscal year ending April 1, 2005.
Quarterly Highlights
Symantec signed 278 contracts worldwide worth more than $100,000 each, including 87 worth more than $300,000 and 13 worth more than $1 million each, during the quarter.
Symantec signed new or extended agreements with customers including the U.S. Air Force; H&R Block Inc.; CIGNA Corporation, one of the largest investor-owned employee benefits organisations in the United States; Nicor Gas Company, one of the nation's largest gas distribution companies; Graybar Electric Company Inc., the nations leading distributor of communications and electrical products and related supply chain management and logistics services; PNC Financial Services Group Inc.; UnumProvident Corporation, the largest provider of group and individual disability income protection insurance in the United States and United Kingdom; Spherion Corporation, a provider of recruitment, technology, and outsourcing services; Hercules Incorporated, a global manufacturer of chemical specialties used in making a variety of products for home, office, and industrial markets; Zurich Financial Services; and Development Bank of Singapore, the largest bank in Singapore.
During the quarter, Symantec released Symantec Enterprise Security Manager (ESM) 6.0, an industry-leading policy compliance solution. With outstanding performance and scalability, Symantec ESM provides centralised, automated and comprehensive security analysis of organisations critical business applications and operating systems.
Symantec announced an enhanced iForceTM Intrusion Detection (IDS) Appliance, powered by Sun and Symantec. A complete high-speed network intrusion detection appliance, the solution combines Symantec ManHunt 3.0 with Suns Fire V60x server and provides flexible deployment options by monitoring up to 2 gigabits per second.
In addition, Symantec announced its client compliancy initiative designed to promote the enforcement of remote and mobile client security policies. As part of the initiative Symantec introduced its new client compliancy application program interface (API), which provides IT Administrators the ability to block access to an organisations network when a computers security level does not meet the requirements defined by the organisations security policies.
About Symantec
Symantec, the world leader in Internet security technology, provides a broad range of content and network security software and appliance solutions to individuals, enterprises and service providers. The company is a leading provider of client, gateway and server security solutions for virus protection, firewall and virtual private network, vulnerability management, intrusion detection, Internet content and e-mail filtering, remote management technologies and security services to enterprises and service providers around the world. Symantecs Norton brand of consumer security products is a leader in worldwide retail sales and industry awards. Headquartered in Cupertino, Calif., Symantec has worldwide operations in 37 countries. For more information, please visit www.symantec.com.au.
NOTE TO EDITORS: If you would like additional information on Symantec Corporation and its products, please view the Symantec Press Centre at http://www.symantec.com/PressCenter/ on Symantec's Web site. All prices noted are in US dollars and are valid only in the United States.
Symantec and the Symantec logo are trademarks or registered trademarks, in the United States and certain other countries, of Symantec Corporation. Additional company and product names may be trademarks or registered trademarks of the individual companies and are respectfully acknowledged.
FORWARD LOOKING STATEMENT: This press release contains forward-looking statements, including forecasts of future revenue and earnings per share, expected activities, and other financial and business results that involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by this press release. Such risk factors include, among others: the sustainability of recent growth rates, particularly in consumer products; the anticipation of the growth of certain market segments, particularly enterprise security; the positioning of Symantec's products in those segments; the competitive environment in the software industry; general market conditions, fluctuations in currency exchange rates, changes to operating systems and product strategy by vendors of operating systems; and whether Symantec can successfully develop new products and the degree to which these gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. Additional information concerning these and other risk factors is contained in the Risk Factors sections of Symantecs previously filed Form 10-K and Form 10-Q. Symantec assumes no obligation to update any forward-looking information contained in this press release except as otherwise required by law.
USE OF NON-GAAP FINANCIAL INFORMATION: In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Symantec reports non-GAAP financial results. Non-GAAP net income and earnings per share exclude acquisition related charges, such as amortization of other intangibles and in-process research and development, and certain other identified charges, such as restructuring and patent settlement, as well as the tax effect of these items. Symantec's management believes these non-GAAP measures are useful to investors because they provide supplemental information that facilitates comparisons to prior periods. Management uses these non-GAAP measures to evaluate its financial results, develop budgets and manage expenditures. The method Symantec uses to produce non-GAAP results is not computed according to GAAP, is likely to differ from the methods used by other companies and should not be regarded as a replacement for corresponding GAAP measures. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which is attached to this release and can be found on the investor relations Web site at www.symantec.com/invest/center.html <http://www.symantec.com/invest/center.html>