Hong Kong – 3 February 2009 – Symantec Corp. (Nasdaq: SYMC) has reported the results of its third quarter of fiscal year 2009, ended 2 January 2009. GAAP revenue for the quarter was US$1.51 billion and non-GAAP revenue was US$1.54 billion. Symantec delivered stronger than expected results on all of its key financial metrics in the fiscal third quarter.
GAAP results: GAAP net loss for the third quarter was US$6.81 billion compared with net income of $132 million for the same quarter last year. GAAP diluted loss per share was US$8.23 compared with diluted earnings per share of US$0.15 for the same quarter last year.
The GAAP net loss for the third quarter of fiscal year 2009 includes a non-cash goodwill impairment charge of approximately US$7 billion. Based on a combination of factors, including the current economic environment and a decline in our market capitalisation, Symantec concluded that there were sufficient indicators to require it to perform an interim goodwill impairment analysis. The company has not completed the goodwill impairment analysis and expect to finalise it during the fourth quarter of fiscal year 2009. It may make an adjustment to this charge when the goodwill impairment analysis is completed.
GAAP deferred revenue at the end of the quarter was US$2.92 billion compared with US$2.88 billion for the same quarter last year. Cash flow from operating activities for the third quarter was US$402 million compared with US$462 million for the same quarter last year.
Non-GAAP results: Non-GAAP net income for the third quarter of fiscal year 2009 was US$350 million, up 20 per cent compared with US$292 million for the same quarter last year. Non-GAAP diluted earnings per share were US$0.42, up 27 per cent compared with earnings per share of US$0.33 for the year ago quarter.
Non-GAAP deferred revenue was US$2.96 billion, up 2 per cent compared with US$2.90 billion at the end of the third quarter of fiscal year 2008. For a detailed reconciliation of the company's GAAP to non-GAAP results, please refer to the condensed consolidated financial statements on:
During the third quarter of fiscal year 2009, Symantec repurchased 16.1 million shares, equivalent to US$200 million. There is US$400 million remaining in the current board authorised stock repurchase plan.
"Effective sales execution and our team's ability to successfully highlight the near-term return on investment benefits of our solutions enabled us to deliver stronger than expected revenue against the backdrop of a challenging global economy," said Enrique Salem, chief operating officer, Symantec. "The combination of top-line revenue growth, ongoing share repurchases and tight expense management has enabled us to achieve our seventh consecutive quarter of double-digit non-GAAP earnings growth. We are well-positioned to continue our success and emerge from this economic downturn as a stronger company."
Business segment and geographic highlights
For the quarter, Symantec's Storage and Server Management segment represented 37 per cent of total non-GAAP revenue and grew 1 per cent year-over-year. The Consumer business represented 29 per cent of total non-GAAP revenue and grew two per cent year-over-year. The Security and Compliance segment represented 26 per cent of total non-GAAP revenue and declined five per cent year-over-year. Services represented eight per cent of total non-GAAP revenue and grew 20 per cent year-over-year.
International revenue represented 50 per cent of total non-GAAP revenue in the third quarter of fiscal year 2009 and declined five per cent year-over-year. The Europe, Middle East and Africa region represented 31 per cent of total non-GAAP revenue for the quarter and declined nine per cent year-over-year. The Asia Pacific/Japan revenue for the quarter represented 14 per cent of total non-GAAP revenue and grew one per cent year-over-year. The Americas, including the United States, Latin America and Canada, represented 55 per cent of total non-GAAP revenue and increased seven per cent year-over-year.
Foreign currency movements negatively impacted non-GAAP revenue by approximately four percentage points year-over-year and non-GAAP deferred revenue by approximately two percentage points year-over-year. Foreign currency movements negatively impacted EMEA non-GAAP revenue by approximately 10 percentage points and APJ non-GAAP revenue by approximately two percentage points year-over-year.
Symantec signed 448 agreements worldwide with a contract value of more than US$300,000 each. Of the 448 agreements, 104 had a value of more than US$1 million. In the third quarter of fiscal year 2009, 84 per cent of these large transactions included multiple products.
Symantec signed new or extended agreements with customers including Continental Airlines, the fourth-largest US-based airline serving more than 300 destinations globally; Yamaha Corporation of America, which offers a full line of musical instruments and audio/visual products to the US and Canadian markets; Japan Tobacco, a leading global tobacco company; IXE Banco, providing financial services in Mexico with a focus on corporate and business banking and high net worth individual investors; Telefonica Moviles Argentina S.A., the leading mobile telecommunications provider in Argentina with more than 15 million customers; Canadian Tire Corporation, retailer of automobile supplies and service, fuel, apparel, and financial services throughout Canada; and SK Telecom, the leader in Korea's information communication industry.
Fourth quarter fiscal year 2009 guidance
Guidance assumes an exchange rate of US$1.32 per Euro for the March 2009 quarter versus the actual weighted average rate of US$1.50 per Euro and the end of period rate of US$1.58 per Euro for the March 2008 quarter.
For the fourth quarter of fiscal year 2009, ending 3 April 2009, GAAP revenue is estimated between US$1.475 billion and US$1.525 billion. GAAP diluted earnings per share are estimated between US$0.12 and US$0.14. GAAP deferred revenue is expected to be in the range of US$2.972 billion and US$3.072 billion.
Non-GAAP revenue for the quarter is estimated between US$1.49 billion and US$1.54 billion. Non-GAAP diluted earnings per share are estimated between US$0.33 and US$0.35. Non-GAAP deferred revenue is expected to be in the range of US$3.0 billion and US$3.1 billion.
Symantec is a global leader in providing security, storage and systems management solutions to help consumers and organisations 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.
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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 estimated charges with respect to the impairment of goodwill, projections of future revenue, earnings per share and deferred revenue, as well as projections of amortisation 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 Factor section of our Form 10-K for the year ended March 28, 2008.
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.