Symantec Posts Much Lower-Than-Expected Earnings

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.