Why Are Symantec Shares Sinking?

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Why Are Symantec Shares Sinking?

By Shoshanna Delventhal | May 11, 2017 — 10:44 PM EDT

Cybersecurity industry pioneer Symantec Corp. (SYMC) saw its shares dip after posting its most recent quarterly earnings report and current-quarter guidance. Symantec stock recovered slightly before closing down about 5.1% at a price of $31.46 per share on Thursday.

While the tech giant posted fiscal fourth-quarter earnings and revenues in line with expectations, investors were disappointed with Q1 forecasts below the Street’s estimates.

Fiscal Q4 In Line with Expectations

The Mountain View, Calif.-based software security vendor reported a fiscal Q4 adjusted loss of $0.28 per share on revenues of $1.14 billion. In the full year, the company posted a loss of $0.17 per share, with sales coming in at $4.02 billion. Moving forward into the firm’s first quarter, ending July, Symantec foresees earnings per share (EPS) of $0.30 on revenue of $1.2 billion at the midpoint. The Street had forecast earnings of $0.38 per share on $1.27 billion in sales.

Chief Executive Officer (CEO) Greg Clark says investors should not to worry about lower-than-expected forecasts in the current quarter. Clark indicates that a rise in cloud computing software sales will lead to a large amount deferred revenue streams in the future, while only depressing revenue in the near term.

CEO: Better Quarters Ahead

“We are seeing the same levels of business,” said Clark, “but revenue in a period is less and goes into our deferred revenues, which makes future quarters better.”

The tech giant’s CEO also told Barron’s in an interview that the firm is “meeting expectations in the middle of a pretty big integration of Blue Coat and LifeLock assets.” Amidst a disrupted industry, Symantec spent $6.5 billion to buy up its two smaller rivals in efforts to boost its cloud-based enterprise and consumer security offerings. (See also: Behind Symantec’s Recent Buyout Spree.)

Other tech giants have gone the same route in trying to carve out a piece of the growing cybersecurity market. Legacy enterprise IT leader Cisco Systems Inc. (CSCO) has gobbled up a number of security businesses in the recent period. Shares of Symantec have lifted 90.8% over the 12-month period and 31.7% year-to-date (YTD).
Published at Fri, 12 May 2017 02:44:00 +0000

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