MOUNTAIN VIEW, Calif. - October 24, 2012 - Symantec Corp. (Nasdaq: SYMC) today reported the results of its second quarter of fiscal year 2013, ended Sept. 28, 2012. GAAP revenue for the fiscal second quarter was $1.7 billion, up 1 percent year-over-year and up 5 percent after adjusting for currency.
"I am pleased with the team's results and progress made this quarter. We delivered solid results during the first quarter of a significant transition for the company," said Steve Bennett, chairman, president and chief executive officer, Symantec. "After travelling the world speaking to employees, customers and shareholders, there is a strong sense of excitement about our future success. While focused on running the company, the team is also hard at work building a strategy and operational plan to deliver greater than 5 percent organic growth and 30 percent operating margins on a sustainable basis within the next two-to-three years."
"We delivered better than expected results with record September revenue and deferred revenue, in addition to strong net income and EPS as we continue to make improvements to the performance of our businesses," said James Beer, executive vice president and chief financial officer, Symantec. "We saw strength in enterprise security and backup as well as growth in consumer security."
GAAP Results for second quarter of fiscal year 2013
- GAAP operating margin was 18.0 percent compared with 17.0 percent for the same quarter last year, up 6 percent year-over-year.
- GAAP net income was $193 million compared with net income of $182 million for the year-ago period, up 6 percent year-over-year.
- GAAP diluted earnings per share were $0.27 compared with $0.24 for the year ago quarter, up 13 percent year-over-year.
- GAAP deferred revenue was $3.619 billion compared with $3.452 billion for the year ago quarter, up 5 percent year-over-year on an actual and currency-adjusted basis.
- Cash flow from operating activities was $178 million compared with $308 million for the year ago period due to higher tax, restructuring and transition payments, foreign currency movements as well as lower September quarter cash collections.
- Symantec ended the quarter with cash, cash equivalents and short-term investments of $4.0 billion. During the quarter, Symantec repurchased 12 million shares for $200 million at an average price of $16.48. Symantec has $483 million remaining in the current board authorized stock repurchase plan.
Non-GAAP Results for second quarter of fiscal year 2013
- Non-GAAP operating margin was 27.5 percent compared with 25.5 percent for the same quarter last year, up 200 basis points year-over-year (up 250 basis points after adjusting for currency) driven by stronger revenue and lower costs.
- Non-GAAP net income was $322 million, compared to $295 million for the same quarter last year, up 9 percent year-over-year.
- Non-GAAP diluted earnings per share were $0.45 compared with earnings per share of $0.39 for the year-ago quarter, up 15 percent year-over-year.
Business Segment Highlights for the Quarter
- The Consumer segment represented 31 percent of total revenue and decreased 1 percent year-over-year (increased 3 percent after adjusting for currency).
- The Security and Compliance segment represented 30 percent of total revenue and increased 6 percent year-over-year (increased 9 percent after adjusting for currency).
- The Storage and Server Management segment represented 35 percent of total revenue and decreased 2 percent year-over-year (increased 2 percent after adjusting for currency).
- Services represented 4 percent of total revenue and increased 2 percent year-over-year (increased 7 percent after adjusting for currency).
Geographic Highlights for the Quarter
- International revenue represented 51 percent of total revenue and increased 1 percent year-over-year (increased 7 percent after adjusting for currency).
- The Europe, Middle East and Africa region represented 26 percent of total revenue and decreased 4 percent year-over-year (increased 7 percent after adjusting for currency).
- Asia Pacific/Japan revenue represented 20 percent of total revenue and increased 6 percent year-over-year (increased 8 percent after adjusting for currency).
- The Americas, including the United States, Latin America and Canada, represented 54 percent of total revenue and increased 2 percent year-over-year on an actual and currency-adjusted basis.
Third Quarter Fiscal Year 2013 Guidance
Guidance assumes an exchange rate of $1.30 per Euro for the December 2012 quarter versus the actual weighted average rate of $1.35 and an end of period rate of $1.30 per Euro for the December 2011 quarter. Our guidance assumes an effective tax rate of 28.5 percent and a common stock equivalents total for the quarter of approximately 700 million shares.
For the third quarter of fiscal 2013, Symantec expects:
- GAAP revenue of $1.72 billion to $1.75 billion, up 0 to 2 percent as reported and up 1 to 3 percent in constant currency.
- GAAP diluted earnings per share between $0.17 and $0.19 as compared to $0.32 in the year ago period.
- Non-GAAP diluted earnings per share between $0.36 and $0.38 as compared to $0.42 in the year ago period, due to investments to better serve customers.
- GAAP deferred revenue is estimated to be between $3.765 billion and $3.825 billion, up 3 to 4 percent on an actual and currency-adjusted basis.
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss the results from the fiscal 2013 second quarter, ended Sept. 28, 2012, 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 protects the world's information, and is the global leader in security, backup and availability solutions. Our innovative products and services protect people and information in any environment – from the smallest mobile device, to the enterprise data center, to cloud-based systems. Our industry-leading expertise in protecting data, identities and interactions gives our customers confidence in a connected world. More information is available at www.symantec.com or by connecting with Symantec at: go.symantec.com/socialmedia.
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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 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 offerings and integration of acquired businesses, and the degree to which these offerings 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 March 30, 2012 and our Current Report on Form 8-K filed on June 11, 2012.
USE OF NON-GAAP FINANCIAL INFORMATION: Our results of operations have undergone significant change due to a series of acquisitions, the impact of stock-based compensation, 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.