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Symantec May Report Flat Q4 EPS, Absence Of Large Storage Deals May Reflect

 May 02, 2012 02:52 PM
 


(R. Chandrasekaran) Security software provider Symantec (Nasdaq: SYMC) will report its fourth quarter earnings results after the market closes today. The company may report flat earnings as subscription contracts from enterprises indicated more deferred revenue than predicted earlier.

The company's results will likely reflect weaker license performance in the absence of a large number of license for rich storage apart from server management agreements compared to the year-ago quarter.

The consumer segment may contribute a little more than 30 percent to overall revenue for Symantec, while security and compliance could represent another 30 percent of revenues. Revenues from storage and server management could add less than 36 percent. Projections may fall further as there were only a few large size deals.

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Currently, Wall Street analysts estimate the company will deliver earnings of 38 cents a share and revenues of $1.68 billion for the fourth quarter. Last year, the company earned 38 cents a share and revenues of $1.67 billion.

Symantec recently reduced its EPS outlook to about 38 cents a share from 41 – 42 cents a share predicted earlier. Similarly, the company cut its revenue forecast to $1.72 billion from its previous $1.73 billion estimate.

Analysts  predicted the company would earn 42 cents just seven days ago. Their revision comes after Symantec warning. During the last four quarters, the company's earnings have topped expectations in three quarters and met with consensus in one quarter.

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In the third quarter, the company earned a $240 million profit, 82 percent higher than $132 million and earnings vaulted 88 percent to 32 cents a share from the year earlier quarter's 17 cents a share. On an adjusted basis, profit grew 15.4 percent to $314 million from $272 million and earnings increased 20 percent to 42 cents a share from 35 cents a share in the previous year quarter.

Revenues were 7 percent higher at $1.72 billion than $1.60 billion recorded in the year-ago quarter. Both earnings and revenues were ahead of Street expectations of 41 cents a share and $1.71 billion.

After the third quarter results, shares of Symantec lost 3.1 percent based on April 30 prices, while the Nasdaq advanced 8.1 percent. In the 52-week period, the stock hit a high of $20.50 and a low of $14.94.

Symantec may report one cent higher than analysts' consensus number, helped by adjusted gross margin and operating margin expansion. However, the focus will be on the outlook for the next fiscal year.

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