- GAAP Revenue of $1.604 billion
- Non-GAAP Operating Margin of 23.6 percent
- Non-GAAP Earnings Per Share of $0.35
- GAAP Deferred Revenue of $3.408 billion
- Cash Flow from Operations of $460 million
MOUNTAIN VIEW, Calif. – January 26, 2011 – Symantec Corp. (Nasdaq: SYMC) ) today reported the results of its third quarter of fiscal year 2011, ended Dec. 31, 2010. GAAP revenue for the fiscal third quarter was $1.604 billion, up 4 percent year-over-year and up 5 percent after adjusting for currency.
“We completed another strong quarter and delivered better than expected results, driven by consumer, backup and data loss prevention as well as stability in the storage management business. In addition, our recent acquisitions are performing above expectations,” said Enrique Salem, president and chief executive officer, Symantec. “Our focus on helping customers secure and manage their information and identities in an increasingly mobile, cloud-based and virtualized world positions us well for long-term growth.”
“In the December quarter, we delivered on all of our key financial metrics. We continued to generate substantial cash flow from operations and achieved record deferred revenue, as a result of strong bookings performance and the contribution from our recent acquisitions,” said James Beer, executive vice president and chief financial officer, Symantec. “This greater than expected deferred revenue performance drove higher sales commissions during the quarter.”
GAAP Results: GAAP operating margin for the third quarter of fiscal year 2011 was 14.3 percent. GAAP net income for the fiscal third quarter was $132 million. GAAP diluted earnings per share were $0.17.
GAAP deferred revenue as of Dec. 31, 2010, was $3.408 billion compared with $3.049 billion as of Jan. 1, 2010, up 12 percent year-over-year on an actual and currency-adjusted basis. Cash flow from operating activities for the third quarter of fiscal year 2011 was $460 million compared with $393 million for the same quarter last year, an increase of 17 percent. Symantec ended the quarter with cash, cash equivalents and short-term investments of $2.452 billion.
Non-GAAP Results: Non-GAAP operating margin for the third quarter of fiscal year 2011 was 23.6 percent. Non-GAAP net income for the third quarter was $272 million. Non-GAAP diluted earnings per share were $0.35.
During the third quarter of fiscal year 2011, Symantec repurchased approximately 16 million shares for $265 million at an average price of $17.03. Symantec has $1.06 billion remaining in the current and newly approved board authorized stock repurchase program.
Business Segment and Geographic Highlights
For the quarter, Symantec’s Consumer segment represented 31 percent of total revenue and increased 4 percent year-over-year (5 percent after adjusting for currency). The Security and Compliance segment represented 26 percent of total revenue and increased 13 percent year-over-year (14 percent after adjusting for currency). The Storage and Server Management segment represented 37 percent of total revenue and increased 1 percent year-over-year (3 percent after adjusting for currency). Services represented 6 percent of total revenue and declined 17 percent year-over-year (15 percent after adjusting for currency).
International revenue represented 52 percent of total revenue in the third quarter of fiscal year 2011 and increased 6 percent year-over-year (9 percent after adjusting for currency). The Europe, Middle East and Africa region represented 29 percent of total revenue for the quarter and declined 3 percent year-over-year (increased 5 percent after adjusting for currency). The Asia Pacific/Japan revenue for the quarter represented 17 percent of total revenue and increased 14 percent year-over-year (8 percent after adjusting for currency). The Americas, including the United States, Latin America and Canada, represented 54 percent of total revenue and increased 5 percent year-over-year on an actual and currency-adjusted basis.
Recent acquisitions continue to perform better than expected. For the quarter, the VeriSign security acquisition generated revenue of $48 million and the PGP and GuardianEdge acquisitions generated revenue of $18 million. The combined earnings per share dilution of these acquisitions was $0.035, which was $0.01 better than expected.
Symantec utilized its recently acquired authentication and encryption technologies to enhance the Symantec portfolio and leveraged the global Symantec distribution network to grow these product lines. This quarter, VeriSign SSL had its highest bookings in nine quarters, its installed base grew by double digit percentage points and VeriSign’s authentication services are now integrated into the Symantec Protection Center, which provides a unified enterprise security management solution. In addition, PGP and GuardianEdge technologies have recently been combined in Symantec Endpoint Encryption 8.0, supporting full disk encryption on multiple operating systems, including Mac OS.
Fourth Quarter Fiscal Year 2011 Guidance
Guidance assumes an exchange rate of $1.35 per Euro for the March 2011 quarter versus the actual weighted average rate of $1.38 per Euro for the March 2010 quarter. The end of period rate for the March 2010 quarter was $1.35, in line with our assumption for the March 2011 quarter.
For the fourth quarter of fiscal year 2011, ending April 1, 2011, revenue is estimated between $1.585 billion and $1.605 billion, up 4 to 5 percent year-over-year.
GAAP diluted earnings per share are estimated between $0.15 and $0.16. Non-GAAP diluted earnings per share are estimated between $0.35 and $0.36.
Deferred revenue is expected to be in the range of $3.61 billion and $3.64 billion, up 13 to 14 percent year-over-year.
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss the results from the fiscal third quarter 2011, ended Dec. 31, 2010, and to review guidance. Interested parties may access the conference call on the Internet at http://www.symantec.com/invest. 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 providing security, storage and systems management solutions to help consumers and organizations secure and manage their information-driven world. Our software and services protect against more risks at more points, more completely and efficiently, enabling confidence wherever information is used or stored. More information is available at www.symantec.com.
Note to Editors: If you would like additional information on Symantec Corporation and its products, please visit the Symantec News Room at http://www.symantec.com/news. All prices noted are in U.S. dollars and are valid only in the United States.
Symantec and the Symantec Logo are trademarks or registered trademarks of Symantec Corporation or its affiliates in the U.S. and other countries. Other names may be trademarks of their respective owners.
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 projections of future revenue, earnings per share and deferred revenue, as well as projections of amortization of acquisition-related intangibles and stock-based compensation and restructuring charges. 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: general economic conditions; 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. We assume no obligation, and do not intend, to update these forward-looking statements as a result of future events or developments. Additional information concerning these and other risks factors is contained in the Risk Factors sections of our Form 10-K for the year ended April 2, 2010.
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), impairment charges 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. 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 other financial information, on the investor relations’ page of our Web site at www.symantec.com/invest.
Symantec Corporation - Condensed Consolidated Financial Statements (pdf)