CUPERTINO, CA, Jul 26, 2006 -- Symantec Corp. (NASDAQ: SYMC) today reported results for the first quarter of fiscal year 2007, ended June 30, 2006. GAAP revenue for the quarter was $1.26 billion and non-GAAP revenue was $1.28 billion. Non-GAAP revenue grew 2 percent over the comparable period a year ago.
GAAP Results: GAAP net income for the fiscal first quarter was $95 million, compared to $199 million for the same quarter last year. Diluted earnings per share was $0.09, compared to earnings per share of $0.27 for the same quarter last year.
Non-GAAP Results: Non-GAAP net income for the fiscal first quarter was $248 million, compared to $311 million for the same quarter last year. Non-GAAP diluted earnings per share was $0.24, compared to diluted earnings per share of $0.25 for the same quarter last year. For a detailed reconciliation of our GAAP to non-GAAP results, please refer to the attached consolidated financial statements.
"Performance for the quarter was driven by strong sales of our Norton Internet Security, Storage Foundation, and enterprise messaging solutions, as well as solid execution by our services organization," said John W. Thompson, Symantec chairman and chief executive officer. "Our results speak to the value of our diversified business model, our strong market leadership in each business unit, and our long-standing relationships with consumers and enterprises around the world. I am very proud of the tremendous team effort."
For the quarter, Symantec's consumer business represented 30 percent of total revenue and grew 6 percent year-over-year on a combined non-GAAP basis. The data center management business represented 27 percent of total revenue and remained flat year-over-year. The security and data management business represented 38 percent of total revenue and declined 2 percent year-over-year. Services revenue represented 5 percent of total revenue and grew 18 percent year-over-year.
International revenues represented 51 percent of total revenue in the first quarter and grew 5 percent year-over-year on a combined non-GAAP basis. Asia Pacific/Japan revenue for the quarter represented 14 percent of total revenue and grew 16 percent year-over-year. The Europe, Middle East, and Africa region represented 31 percent of total revenue for the quarter and grew 1 percent year-over-year. The Americas, including the United States, Latin America, and Canada, represented 55 percent of total revenue and declined 1 percent year-over-year.
GAAP short- and long-term deferred revenue at the end of the June 2006 quarter was $2.209 billion. Non-GAAP deferred revenue at the end of the June 2006 quarter reached a record $2.244 billion. Non-GAAP deferred revenue grew 26 percent as compared to the June 2005 quarter.
September Quarter Forecast
For the September 2006 quarter, GAAP revenue is estimated between $1.265 billion and $1.295 billion. GAAP diluted earnings per share for the September quarter is estimated between $0.11 and $0.12.
Non-GAAP revenue for the September quarter is estimated between $1.275 billion and $1.305 billion. Non-GAAP diluted earnings per share is estimated between $0.26 and $0.27.
Fiscal Year 2007 Forecast
For the fiscal year ending March 2007, GAAP revenue is estimated in the range of $5.1 billion to $5.3 billion. GAAP diluted earnings per share for the fiscal year ending in March 2007 is estimated between $0.46 and $0.56.
To adjust for the $1.5 billion stock buy back program announced in the June quarter, Symantec is increasing its non-GAAP earnings per share guidance for FY07 by $0.06. Non-GAAP revenue is estimated in the range of $5.2 billion to $5.4 billion. Non-GAAP diluted earnings per share is estimated between $1.06 and $1.16.
-- Symantec signed 280 contracts worldwide worth more than $300,000 each, including 63 worth more than $1 million each, during the quarter.
-- Symantec signed new or extended agreements with the following customers: Advocate Health Care, the largest fully integrated not-for- profit healthcare delivery system in metropolitan Chicago and one of the top 10 systems in the country; Best Buy Co. Inc., North America's number- one specialty retailer of consumer electronics, personal computers, entertainment software and appliances; Illinois' Cook County, home to 5 million residents in 129 municipalities including the City of Chicago; CedarCrestone, a leading-edge consulting, hosting, and managed services company; TiVo Inc., the creator and leader in advertising solutions and television services for digital video recorders (DVRs); Fujitsu Network Communications Inc., a leading supplier of wireline/wireless networking solutions to North American telecom, cable and wireless service providers; NCR Corp., a leading global technology company helping businesses build stronger relationships with their customers; Impac Cos., one of the nation's largest non-conforming residential mortgage loan originators; Sony Pictures Imageworks Inc., an Academy Award winning, state-of-the-art digital production studio; Quixtar Inc., which provides an opportunity for individuals to own their own businesses through a system of network marketing and online sales.
-- International customers from the quarter included Australian Stock Exchange Ltd., the primary national stock exchange and provider of market data for Australia; Hutchison Telecommunications (Australia) Ltd., focused on delivering leading communications and multimedia services to the Australian consumer; Fabrica Nacional de Moneda y Timbre, the national mint of Spain; Jiangsu Mobile Communications, a subsidiary of China Mobile; Mahindra & Mahindra Ltd., an India-based conglomerate offering information technology, trade and finance related services, and infrastructure development.
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss the fiscal first quarter, ended June 30, 2006, and to review guidance for the fiscal year 2007. 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 the world leader in providing solutions to help individuals and enterprises assure the security, availability, and integrity of their information. Headquartered in Cupertino, Calif., Symantec has operations in 40 countries. More information is available at www.symantec.com.
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FORWARD-LOOKING STATEMENTS: This press release contains statements regarding our financial and business results, which may be considered forward-looking within the meaning of the U.S. federal securities laws, including statements relating to projections of future revenue and earnings per share for the second quarter and year of fiscal 2007, and projections of deferred revenue, amortization of acquisition related intangibles and stock-based compensation. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied in this press release. Such risk factors include those related to: maintaining customer and partner relationships; the anticipated growth of certain market segments, particularly with regard to security and storage; the competitive environment in the software industry; changes to operating systems and product strategy by vendors of operating systems; fluctuations in currency exchange rates; the timing and market acceptance of new product releases and upgrades; the successful development of new products and integration of acquired businesses, and the degree to which these products and businesses gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. Additional information concerning these and other risk factors is contained in the Risk Factors section of our Form 10-K for the year ended March 31, 2006. We assume no obligation to update any forward-looking information contained in this press release.
USE OF NON-GAAP FINANCIAL INFORMATION: Our results of operations have undergone significant change due to a series of acquisitions, the impact of SFAS 123(R) and other corporate events. To help our readers understand our past financial performance and our future results, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Our non-GAAP results are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. All references to "combined non-GAAP" financial information for pre-acquisition periods include our results with those of Veritas Software Corporation for like fiscal quarters (i.e., combining our results for our first quarter of fiscal 2006, which ended July 1, 2005, with the result for Veritas' first quarter of fiscal 2005, which ended March 31, 2005). Investors are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which is attached to our quarterly earnings release and which can be found, along with additional combined non-GAAP and other financial information, on the investor relations page of our Web site at www.symantec.com/invest/center.html.