) reported earnings per share of 39 cents in the first quarter of
2013, comfortably ahead of the Zacks Consensus Estimate of 33
Symantec reported revenues of $1.67 billion in the quarter, up
0.9% year over year from $1.65 billion. The company's investment in
cloud security and mobility is slowly paying off, and this is
helping the company to gain market share globally.
Symantec's Consumer segment represented 31.0% of the total
revenue and was down 1.0% year over year during the quarter.
Security and Compliance segment (around 30.0% of the total revenue)
increased 7.0% on a year-over-year basis.
This apart, Storage and Server Management segment of the company
represented around 35.0% of the total revenue and reported a
year-over-year decrease of 2.0%. Moreover, the Services segment
represented 4.0% of the total revenue and declined approximately
2.0% on a year-over-year basis.
The company generated around 51.0% of the total revenue from the
market and remained flat on a year-over-year basis. Moreover, the
Europe, Middle East and Africa
region (26.0% of revenues) declined 8.0% on a year-over-year basis.
revenue (contributing around 19.0% of the total revenue) registered
a growth of 9.0% on a year-over-year basis. The Americas, which
includes United States, Latin America and Canada, represented
around 55.0% of the total revenue, and witnessed a year-over-year
growth of 3.0%.
Gross margin in the quarter was 82.97%, down 136 basis points
(bps) from 84.33% in the year-ago period. The decline in gross
margin was due to higher costs associated with the company's
businesses, and the company expects this trend to continue going
Operating margin was 16.1%, down 220 bps from 18.3% in the
year-ago quarter. Operating margin declined as a result of higher
operating expense, arising from a substantial increase in research
& development and general & administrative expenses.
Net income in the reported quarter was $172.0 or 24 cents per
share compared with $191.0 million or 25 cents per share in the
Excluding special items like operating expense adjustment,
non-cash interest expense and related tax adjustments, adjusted net
income in the quarter was 39 cents per share compared with 37 cents
per share in the year-ago period.
Symantec registered cash, cash equivalents and short-term
investments of $4.08 billion, compared with $3.21 billion in the
prior quarter. Long-term debt for the company stood at $2.09
billion, up from $2.04 billion in the previous quarter. Cash flow
from operating activities was $340 million versus $503 million the
During the quarter, the company repurchased 19 million shares
for an average price of $15.59, totaling $301 million.
The company expects GAAP revenue to be in the range of $1.635
billion and $1.665 billion, reflecting a year over year decline of
1.0%-3.0%, for the fiscal year 2013.
Symantec has delivered modest first quarter results with EPS
surpassing the Zacks Consensus Estimate and revenue improving on a
yearly basis. The company also witnessed a mixed geographical
revenue performance. The company has enough cash in hand and
repurchased shares during the quarter
Uncertainty over PC sales is going to affect its Consumer
segment throughout the year. Moreover, as smaller companies like
are coming up with better products at regular interval, it is
intensifying the competition in this segment.
Reduction in tech spending by different government and private
organization, stiff competition from
-- acquired by
as well as the prevailing economic turmoil in Europe will likely
dampen the company's business prospect. Symantec provided a
mediocre guidance, and we believe that this could be due to the
above mentioned reasons.
Symantec has a Zacks #4 Rank, implying a short term Sell
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