Symantec Reports Strong First Quarter Revenue and Earnings
Symantec Corp. (Nasdaq: SYMC) today reported the results of its first quarter of fiscal year 2008, ended June 29, 2007. GAAP revenue for the quarter was $1.40 billion and non-GAAP revenue was $1.42 billion. Non-GAAP revenue grew 10 percent over the comparable period a year ago.
GAAP deferred revenue at the end of the June 2007 quarter was $2.66 billion, compared to $2.31 billion at the end of the June 2006 quarter. Non-GAAP deferred revenue at the end of the quarter reached $2.71 billion, up 16 percent compared to $2.34 billion at the end of the June 2006 quarter. Symantec continues to benefit from an increasing volume of predictable revenue rolling off the balance sheet driven by its deferred revenue model.
GAAP Results: GAAP net income for the June 2007 quarter was $95 million, versus last year’s equivalent figure of $101 million. Diluted earnings per share of $0.10 were flat versus the same quarter last year. Profits were impacted by a $19 million restructuring charge related to the reduction in force announced in February 2007 and further facilities consolidation activities.
Non-GAAP Results: Non-GAAP net income for the June 2007 quarter was $263 million, up 4 percent compared to $253 million for the same quarter last year. Non-GAAP diluted earnings per share were $0.29, up 21 percent compared to diluted earnings per share of $0.24 for the same quarter last year. For a detailed reconciliation of our GAAP to non-GAAP results, please refer to the condensed consolidated financial statements below.
“Performance for the quarter was driven by strong demand in many of our core and emerging technology solutions, as well as solid execution by our services, consumer and Altiris teams,” said John W. Thompson, chairman and chief executive officer, Symantec. “We’re off to a good start to our fiscal year.”
For the quarter, Symantec’s Consumer segment represented 30 percent of total non-GAAP revenue and grew 11 percent year-over-year. The Security and Data Management segment represented 30 percent of total revenue and grew 4 percent year-over-year. The Data Center Management segment represented 28 percent of total revenue and grew 5 percent year-over-year. Services represented 6 percent of total revenue and grew 13 percent year-over-year. The Altiris segment includes revenues from the acquisition of Altiris and Symantec’s Ghost, pcAnywhere and LiveState Delivery solutions, and represented 6 percent of total revenue.
International revenues represented 51 percent of total non-GAAP revenue in the June 2007 quarter and grew 12 percent year-over-year. The Europe, Middle East and Africa region represented 33 percent of total revenue for the quarter and grew 15 percent year-over-year. The Asia Pacific/Japan revenue for the quarter represented 13 percent of total revenue and grew 8 percent year-over-year. The Americas, including the United States, Latin America and Canada, represented 54 percent of total revenue and increased 8 percent year-over-year.
September Quarter 2007 Guidance
For the September 2007 quarter, GAAP revenue is estimated between $1.35 billion and $1.38 billion. GAAP diluted earnings per share are estimated between $0.07 and $0.09.
Non-GAAP revenue for the September 2007 quarter is estimated between $1.37 billion and $1.40 billion. Non-GAAP diluted earnings per share are estimated between $0.24 and $0.26.
GAAP deferred revenue is expected to be in the range of $2.53 billion and $2.58 billion. Non-GAAP deferred revenue is expected to be in the range of $2.55 billion and $2.60 billion.
For the September 2007 quarter, we expect cash flow from operating activities to be below the September 2006 quarter cash flow from operating activities of $276 million.
Symantec signed 249 contracts worldwide worth more than $300,000 each, including 48 worth more than $1 million each, during the quarter. Of those 249 contracts, more than 70 percent were multiple product deals.
In North America, Symantec signed new or extended agreements with customers including Atmel, an industry leader in the design and manufacture of advanced semiconductors; Accor North America, a division of Accor, one of the world’s largest groups in travel, tourism and corporate services; Florida Department of Transportation, which oversees 7,450 employees statewide, 41,000 highway lane miles, 6,381 bridges, 14 seaports and 2,707 railway miles; GTECH Corp., a leading gaming technology and services company; Children’s Healthcare of Atlanta, one of the leading pediatric hospitals in the country, recognized for excellence in cancer, cardiac and neonatal care; AMN Healthcare, Inc., the nation’s largest healthcare staffing company; Rite Aid Corporation, a leading drugstore chain with more than 5,000 stores in 31 U.S. states and the District of Columbia; Indiana University, educating 97,000 students on eight campuses across the state and South Carolina Department of Health and Environmental Control, a health agency that promotes and protects the health of the public and the environment.
New or extended agreements with international customers from the quarter included British Sky Broadcasting, which operates the UK’s largest digital pay television platform, Sky Digital; National Health Insurance Corp., the only public health insurer in Korea; Beijing Mobile, a subsidiary of China Mobile Ltd., the leading mobile services provider in China; Colegio de Registradores de Espana, the Association of Spanish Property and Commercial Registrars; Siemens IT Solutions and Services Brazil, part of one of the world’s largest technology groups and Cable & Wireless Jamaica, the leading full-service telecommunications provider in the Americas & Caribbean region.
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss the fiscal first quarter, ended June 29, 2007, and to review guidance. Interested parties may access the conference call on the Internet at http://www.symantec.com/invest/index.html. To listen to the live call, please go to the Web site at least 15 minutes early to register, download, and install any necessary audio software. A replay and script of our officers’ remarks will be available on the investor relations’ home page shortly after the call is completed.
Symantec is a global leader in infrastructure software, enabling businesses and consumers to have confidence in a connected world. The company helps customers protect their infrastructure, information and interactions by delivering software and services that address risks to security, availability, compliance and performance. Headquartered in Cupertino, Calif., Symantec has operations in 40 countries. More information is available at www.symantec.com.
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