Security software maker Symantec Corp. (NASDAQ:SYMC) is set to benefit from product expansion and a pricing environment that could bode well for its key consumer business.
Symantec's products protects and manages information, identity and transactions through a range of solutions including software, hardware and services.
The company's Norton One offering is expected to be available on March 22 with the possibility of concurrent availability of Norton 360 Everywhere. Price points of both products should be above existing Norton lines and represents the first significant Norton brand expansion since fiscal 2008.
"We expect SYMC to officially launch its Norton One product on March 22 which will see a higher price point and should lead to upward bookings and revenue revisions," Jefferies analyst Aaron Schwartz wrote in a note to clients.
The product releases will form a more aggressive expansion into the consumer mobile device market, and bring the dual benefit of a price increase and product mix shift. The combination should mean upward estimate revisions to the company's consumer business.
The product mix shift would benefit average revenue per user, given the higher price points for both new solutions. Symantec has confirmed pricing of Norton One at $150, while pricing details of Norton 360 Everywhere has not been disclosed. Schwartz expects the price to fall between Norton 360 and Norton One in the $100 range.
The analyst, who ratesSymantec a "buy" said the dual benefit of a product mix shift and price increase is a combination the company has not experienced in four years, and it has historically brought higher growth to the business. In the last cycle, it has brought 9 percent.
"Price and product mix shift have been far more important inputs to the model than PC unit growth, which has been the main concern surrounding the business, and should the product launches occur later this week we would expect positive estimate revisions to begin to occur," Schwartz noted.
Meanwhile, renewal prices on existing lines have also increased. Symantec has increased both the retail and renewal prices for its Norton Internet and Norton 360 product lines by an average of 14 percent.
"Renewal prices are a far superior input to the Consumer model than retail prices, should have a positive impact on bookings and revenue later this year and will encourage upgrades to the higher-end Norton One and 360 Everywhere solutions,"Schwartz added.
For the third quarter ended Dec.30, 2011, Symantec reported GAAP net income of $240 million or 32 cents per share, compared to $132 million or 17 cents per share for the year-ago quarter. Excluding items, the company earned 42 cents per share, topping Street view by a penny. Revenue for the third quarter rose 7 percent to $1.72 billion, while analysts had a consensus revenue estimate of $1.71 billion for the third quarter.
For the fourth quarter, management expects non-GAAP earnings of 41 cents to 42 cents a share on revenue of $1.72 billion to $1.73 billion. Analysts currently expect the company to earn 42 cents per share on revenue of $1.73 billion for the fourth quarter.