Symantec Corporation (SYMC)

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Symantec Corp. (SYMC)

F4Q09 Earnings Call

May 6, 2009 5:00 pm ET


Helyn Corcos – Vice President, Investor Relations

Enrique Salem - President and Chief Executive Officer

James Beer - Chief Financial Officer


Sarah Friar - Goldman Sachs

Heather Bellini - UBS

Kash Rangan - Bank of America

Adam Holt - Morgan Stanley

Philip Winslow - Credit Suisse

John Difucci - JP Morgan

Daniel Ives – FBR Capital Markets

Rob Owens - Pacific Crest Securities

Brent Thill - Citi Investment Research

Todd Raker - Deutsche Bank

Walter Pritchard - Cowen & Company

Tim Klassel - Thomas Weisel Partners

Robert Breza - RBC Capital Markets



Good day and welcome to today's Symantec's fourth quarter 2009 conference call. Today's call is being recorded. And at this time I would like to turn the call over to Ms. Helyn Corcos, Vice President of Investor Relations.

Helyn Corcos

Good afternoon and thank you for joining our call to discuss fourth quarter and full year 2009 financial results. With me today are Enrique Salem, Symantec's President and Chief Executive Officer, and James Beer, Symantec's Executive Vice President and Chief Financial Officer.

In a moment I will turn the call over to Enrique. He will start with a few comments about our quarterly activities and results, James will then provide financial and operational details, as well as review our guidance as outlined in the press release. Then Enrique will wrap it up with comments about our fiscal year 2010 focus areas. This will be followed by a question and answer session.

Today's call is being recorded and will be available for replay on Symantec's Investor Relations Web site at\invest. A copy of today's press release and supplemental information are available on our Web site and a copy of today's prepared remarks will be available on the Investor Relations Web site shortly after the call is completed.

Before we begin, I’d like to remind you that our June 2008 period results included 14 weeks of activity versus the normal 13 weeks that the June 2009 quarter will have. I’d like to take a moment to review the specific financial details of the extra week.

Non-GAAP revenue for the June 2008 quarter included approximately $75.0 million of a one-time benefit and non-GAAP earnings per share included approximately $0.03 of a one-time benefit generated from the extra week.

Non-GAAP deferred revenue included a one-time negative impact of approximately $5.0 million from the extra week.

We will exclude the impact of the extra week when comparing our 2009 guidance and results to the June 2008 results.

Next, we will review our non-GAAP financial results focusing on constant currency growth rates unless otherwise stated. For the March 2009 quarter the actual weighted average exchange rate was $1.30 per Euro and the end of period rate was $1.34 per Euro, compared to our guided rate of $1.32 per Euro. For the March 2008 quarter, the actual weighted average rate was $1.50 per Euro and the end of period rate was $1.58 per Euro.

For revenue and operating expense purposes, current and comparative prior period results for entities reporting in currencies other than the U.S. dollar are converted into U.S. dollars at the actual exchange rates in effect during the respective periods.

For deferred revenue, results are converted into U.S. dollars at the actual exchange rate in effect at the end of the period. We have included a summary and reconciliation table of the year-over-year growth rates in our press release tables and in our supplemental information.

Given the rapidly moving exchange rate environment, I’d like to remind everyone to continue to apply the rules of thumb that we have provided as a guide to the impact of currency fluctuations on our financial metrics.

For every U.S. cent movement versus the Euro, revenue would be impacted by approximately $4.5 million and deferred revenue would be impacted by approximately $7.0 million.

In addition, for every $0.05 U.S. movement versus the Euro, non-GAAP earnings per share would be impacted by approximately $0.01.

It is important to note however, that these rules of thumb will move around based on the actual currency fluctuations and the mix of our revenues and expenses.

Moving on, some of the information discussed on this call, including our projections regarding revenue, operating results, deferred revenue, cash flow from operations, amortization of acquisition-related intangibles and stock-based compensation, for the coming quarter contain forward-looking statements. These statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Additional information concerning these risks and uncertainties can be found in the company’s most recent periodic reports filed with the U.S. Securities and Exchange Commission. Symantec assumes no obligation to update any forward-looking statements.

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Symantec reports non-GAAP financial results. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP results, which can be found in the press release and on our web site.

And now, I would like to introduce our new CEO, Mr. Enrique Salem.

Enrique Salem

Good afternoon everyone. This quarter marks a solid close to fiscal year 2009. The breadth and depth of our portfolio contributed to the solid results despite the current macroeconomic environment and currency headwinds during the second half of the year. Results for the quarter were driven by strength in enterprise backup, storage management, data loss prevention and consumer.

Our strong non-GAAP earnings per share are a result of eliminating unnecessary costs and shifting our spending to areas with the greatest returns. We continue to generate substantial cash flow from operations and strong deferred revenue. Now, I’d like to highlight a few key items of our fiscal fourth quarter.

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