) dropped 6% in after-hours trade on Thursday after the software
security maker announced the removal of Steve Bennett as the
president and chief executive officer.
Bennett took over Symantec's reigns in mid-2012 and initiated
several organizational changes to counter the company's lower
sales and profitability.
However, while the realignment of the organization's structure
by eliminating several mid-level management positions bolstered
the bottom line, sales force reorganizations have not yet yielded
the desired results. On the other hand, Symantec's sales were
impacted by the disruptions in customer relationships.
Moreover, the weak PC market is affecting the sales of
Symantec's security solutions. As per the latest report from IDC,
PC shipments will drop 6.1% in 2014, the third consecutive year
of decline. This will affect the sale of Symantec's PC security
solutions and business volume to a considerable extent.
To counter this decline, the company is concentrating more on
the mobile business, which will enable it to generate additional
Nonetheless, Symantec reiterated fourth-quarter fiscal 2014
guidance reflecting that the CEO's exit would not have a material
impact on the company's operations.
For the fourth quarter of 2014, the company expects revenues
in the range of $1.615 to $1.655 billion, down from $1.748
billion reported in the year-ago period.
Non-GAAP operating margins are also unchanged at 24.5% to
26.0% compared to 24.1% last year. Management also expects
non-GAAP earnings per share between 40 cents and 42 cents
compared with 44 cents in the year-ago period.
Symantec is making efforts to attract small and mid-sized
businesses with the introduction of enhanced versions of storage
management and Internet security solutions. These solutions are
primarily targeted at information-driven businesses.
However, the company faces increased competition from other
bellwethers such as
Currently, Symantec has a Zacks Rank #3 (Hold). A
better-ranked stock at this time would be
), which sports a Zacks Rank #1 (Strong Buy).
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