Symantec Posts Much Lower-Than-Expected EarningsBy Ericka Chickowski | Print
Company officials blame slow business-to-business sales for its poor performance, claiming that enterprises are choosing to opt for smaller deals to weather the current economic climate.Symantec this week reported a dramatic drop in revenue and earnings during the fiscal quarter ending July 3, missing analyst projections and sparking a drop in shares yesterday.
In its financial statements released yesterday, the company said it saw earnings shear off from $172 million during the same quarter last year down to $73 million in this most recently ended quarter. Year-over-year comparisons also showed a drop in revenue from $1.65 billion down to $1.43 billion.
Symantec reported earnings of 34 cents per share, excluding special items, below the average Wall Street analysts projection of 36 cents, according to Reuters.
Company officials blamed slow business-to-business sales for its poor performance, claiming that enterprises are choosing to opt for smaller deals to weather the current economic climate. Even its security compliance division—a niche commonly thought to be immune from economic swings—experienced a dip of about 14 percent.
"On the enterprise side, some customers focused their spending on shorter-term contracts or maintenance renewals, resulting in fewer new license deals, but stronger deferred revenue," Enrique Salem, president and CEO of Symantec, said in a statement. "We’ve laid the groundwork to drive improved execution in the second half of the fiscal year."
The one bright spot in its financial report was the performance of its consumer security division, which only saw a 4 percent drop.
"We are pleased with the performance of the consumer business," Salem said.
The markets did not react well to the report yesterday, with shares dropping by about 7.5 percent. Overall, Symantec’s stock has fallen by about 10 percent in the past year.