- GAAP Revenue of $1.668 billion
- Non-GAAP Operating Margin of 26.1%
- Non-GAAP Earnings Per Share of $0.43
- GAAP Deferred Revenue of $3.745 billion
- Cash Flow from Operations of $340 million
SINGAPORE – July 26, 2012 – Symantec Corp. (Nasdaq: SYMC) today reported the results of its first quarter of fiscal year 2013, ended June 29, 2012. GAAP revenue for the fiscal first quarter was $1.668 billion, up 1 percent year-over-year and up 4 percent after adjusting for currency.
"Symantec delivered another solid quarter. The company's investment in cloud security and mobility continues to gain momentum and position us well worldwide," said Steve Bennett, chairman, president and chief executive officer, Symantec. "We are making progress on many fronts, but believe we can further accelerate the company's value to employees, customers, partners and shareholders."
"We delivered record June quarter revenue and deferred revenue, as well as growth in earnings per share despite an 11 percent foreign currency headwind," said James Beer, executive vice president and chief financial officer, Symantec. "We saw strength in endpoint protection, consumer security, authentication services, data loss prevention, and backup appliances."
GAAP Results: GAAP operating margin for the first quarter of fiscal year 2013 was 16.1 percent compared with 18.3 percent for the same quarter last year. GAAP net income for the fiscal first quarter was $172 million compared with net income of $191 million for the year-ago period. GAAP diluted earnings per share were $0.24 compared with $0.25 for the year ago quarter. Variation in year-over-year GAAP results were as expected due to increases in restructuring costs and IT infrastructure investments.
GAAP deferred revenue as of June 29, 2012, was $3.745 billion compared with $3.689 billion as of July 1, 2011, up 2 percent year-over-year and up 5 percent after adjusting for currency. Cash flow from operating activities for the first quarter of fiscal year 2013 was $340 million compared with $503 million for the year ago period.
Non-GAAP Results: Non-GAAP operating margin for the first quarter of fiscal year 2013 was 26.1 percent compared with 27.0 percent for the same quarter last year. Non-GAAP net income for the first quarter was $309 million, flat compared to the year-ago period. Non-GAAP diluted earnings per share were $0.43 compared with earnings per share of $0.40 for the year-ago quarter, an increase of 7 percent year-over-year.
Symantec ended the quarter with cash, cash equivalents and short-term investments of $4.1 billion. During the quarter, Symantec repurchased 19 million shares for $301 million at an average price of $15.59. Symantec has $683 million remaining in the current board authorized stock repurchase plan.
Business Segment and Geographic Highlights
For the quarter, Symantec's Consumer segment represented 31 percent of total revenue and decreased 1 percent year-over-year (increased 2 percent after adjusting for currency). The Security and Compliance segment represented 30 percent of total revenue and increased 7 percent year-over-year (increased 10 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 1 percent after adjusting for currency). Services represented 4 percent of total revenue and declined 2 percent year-over-year (increased 1 percent after adjusting for currency).
International revenue represented 51 percent of total revenue in the first quarter of fiscal year 2013 with a flat growth rate year-over-year (increased 6 percent after adjusting for currency). The Europe, Middle East and Africa region represented 26 percent of total revenue for the quarter and decreased 8 percent year-over-year (increased 3 percent after adjusting for currency). The Asia Pacific/Japan revenue for the quarter represented 19 percent of total revenue and increased 9 percent year-over-year (increased 10 percent after adjusting for currency). The Americas, including the United States, Latin America and Canada, represented 55 percent of total revenue and increased 3 percent year-over-year on an actual and currency-adjusted basis.
Our acquisitions exceeded our expectations this quarter, generating $24 million in revenue from the Clearwell and LiveOffice acquisitions as we leveraged the scope and scale of the Symantec sales force.
Second Quarter Fiscal Year 2013 Guidance
Guidance assumes an exchange rate of $1.23 per Euro for the September 2012 quarter versus the actual weighted average rate of $1.41 and an end of period rate of $1.34 per Euro for the September 2011 quarter. Our guidance assumes an effective tax rate of 28.5 percent and a common stock equivalents total for the quarter of approximately 710 million shares.
Given the recent strengthening of the US dollar relative to other currencies, for the second quarter of fiscal year 2013, ending Sept. 28, 2012, GAAP revenue is estimated between $1.635 billion and $1.665 billion, as compared to revenue of $1.68 billion during the September 2011 quarter. Symantec is expecting revenue to decline 1 percent to 3 percent year-over-year as reported, and be up 1 percent to 3 percent in constant currency.
As a result of raising a billion dollars in senior unsecured notes during June, our interest expense for the next four quarters will be higher by $8 million per quarter. This will decrease EPS by $0.008 per quarter for a total of approximately $0.03 dilution through June 2013.
GAAP diluted earnings per share are estimated between $0.15 and $0.19 as compared to $0.24 in the year ago period. Non-GAAP diluted earnings per share are estimated between $0.35 and $0.39 as compared to $0.39 in the year ago period, down 10 percent to flat on an as reported basis.
GAAP deferred revenue is expected to be in the range of $3.49 billion and $3.55 billion, compared to $3.45 billion at the end of September 2011. Symantec is expecting deferred revenue to be up 1 percent to 3 percent year-over-year as reported, and up 3 percent to 4 percent in constant currency.
Symantec has scheduled a conference call for 8 a.m. ET/5 a.m. PT today to discuss the results from the fiscal first quarter 2013, ended June 29, 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 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 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.