Symantec Reports Record Revenue Growth In Fiscal Second Quarter
Raises Fiscal Year Guidance
CUPERTINO, Calif. - Oct. 20, 2004 -
Symantec Corp. (Nasdaq: SYMC), the global leader in information security, today reported results for the fiscal second quarter ended Oct. 1, 2004. Symantec posted revenue for the quarter of $618 million, a 44 percent increase compared to $429 million for the same quarter last year, driven by solid execution across all business segments and regions.
GAAP Results: Net income for the fiscal second quarter was $136 million, compared to $83 million for the same quarter last year. Earnings per share was $0.38, a 58 percent increase compared to earnings per share of $0.24 for the year-ago quarter.
Non-GAAP Results: Non-GAAP net income for the fiscal second quarter was $146 million, compared to $91 million for the same quarter last year. Non-GAAP earnings per share was $0.41, a 52 percent increase compared to earnings per share of $0.27 for the year-ago quarter. Non-GAAP results and related reconciliation, as outlined in the attached consolidated statements, exclude amortization of other intangibles from acquisitions, amortization of deferred stock-based compensation, acquired in-process research and development, restructuring charges, and patent settlement charges as well as related income tax benefits. See "Use of Non-GAAP Financial Information" below.
"We continue to gain momentum in our consumer and enterprise business segments as customers look for solutions to help them create a balance between the security and availability of their information assets," said John W. Thompson, Symantec chairman and CEO. "In addition, our international performance remains solid across all regions."
For the quarter, Symantec's worldwide enterprise business, including enterprise security, enterprise administration, and services, represented 49 percent of total revenue and grew 29 percent year-over-year. Symantec's enterprise security business represented 36 percent of total revenue and grew 27 percent; the enterprise administration business represented 11 percent of total revenue and grew 36 percent; and the services business represented 2 percent of total revenue and grew 22 percent. Symantec's consumer business represented 51 percent of total revenue and grew 63 percent.
International revenues represented 52 percent of total revenue in the second quarter and grew 51 percent over the same quarter last year. The Americas, including the United States, Latin America, and Canada, grew 38 percent. The Europe, Middle East and Africa region recorded 52 percent growth and Japan/Asia Pacific grew 52 percent.
Symantec is providing forward-looking guidance for the fiscal third quarter ending Dec. 31, 2004, as follows:
Symantec is raising forward-looking guidance for fiscal year 2005 ending April 1, 2005, as follows:
- Revenue is estimated between $645 million and $665 million.
- At the mid-point of revenue guidance, GAAP earnings per share is estimated to be $0.41.
- At the mid-point of revenue guidance, non-GAAP earnings per share is estimated to be $0.43.
Non-GAAP earnings per share guidance excludes the pre-tax amortization of other intangibles from acquisitions, amortization of deferred stock-based compensation, acquired in-process research and development and restructuring charges of approximately $14 million and $56 million for the quarter ending Dec. 31, 2004, and the fiscal year ending April 1, 2005, respectively.
- Revenue is estimated to be $2.495 billion, an increase of $90 million from prior guidance.
- By business segment we are estimating revenue growth for fiscal year 2005 as follows:
- Enterprise Security 24% growth
- Consumer Products 44% growth
- Enterprise Administration 25% growth
- Services 19% growth
- Deferred revenue is expected to be between $1.30 billion and $1.35 billion at the end of fiscal year 2005.
- GAAP earnings per share is estimated at $1.54, an increase of $0.06 from prior guidance.
- Non-GAAP earnings per share is estimated at $1.64, an increase of $0.07 from prior guidance.
- During the quarter the total number of transactions worldwide
worth more than $100,000 each was 311, including 67 worth more than
$300,000 each and 10 worth more than $1million each. Customers from
the quarter included Park Nicollet Health Services,
a nonprofit, integrated care system; StorageTek,
a leading provider of enterprise information lifecycle management;
and South Florida Water Management District, a
regional, governmental agency that oversees water resources in the
southern half of Florida.
- International customers from the quarter included TELCEL,
the leading wireless operator in Mexico; PartnerRe Ltd.,
a leading international reinsurance group providing multi-line reinsurance
to insurance companies on a worldwide basis; TelstraClear
Limited, New Zealand's second largest full-service telecommunications
company; iiNet, a leading Internet Service Provider
in Australia and New Zealand; Alenia Spazio, a
leading Italian aerospace company; All Nippon Airways Co.,
Ltd, a leading airline company in Japan; and Mitsui
Sumitomo Insurance Company, Limited, one of the leading
non-life insurance companies in Japan.
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today
to discuss fiscal second quarter 2005 results, and to review guidance
for the fiscal third quarter and fiscal year 2005. 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.
Consolidated Financial Statements
USE OF NON-GAAP FINANCIAL INFORMATION: In addition
to reporting financial results in accordance with generally accepted
accounting principles, or GAAP, Symantec reports non-GAAP financial
results. Non-GAAP net income and earnings per share exclude acquisition
related charges, such as amortization of other intangibles, amortization
of deferred stock-based compensation and in-process research and development,
and certain other identified charges, such as restructuring and patent
settlement, as well as the tax effect of these items. Symantec's management
believes these non-GAAP measures are useful to investors because they
provide supplemental information that facilitates comparisons to prior
periods. Management uses these non-GAAP measures to evaluate its financial
results, develop budgets and manage expenditures. The method Symantec
uses to produce non-GAAP results is not computed according to GAAP,
is likely to differ from the methods used by other companies and should
not be regarded as a replacement for corresponding GAAP measures.
Investors are encouraged to review the reconciliation of these non-GAAP
financial measures to the comparable GAAP results, which is attached
to this release and can also be found on the investor relations Web
site at www.symantec.com/invest/index.html.
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 more than 40 countries. More information is available at www.symantec.com.
NOTE TO EDITORS:
: If you would like additional information on Symantec Corporation and its products, please view the Symantec Press Center at http://www.symantec.com/PressCenter/ on Symantec's Web site. All prices noted are in US dollars and are valid only in the United States.
Symantec, the Symantec logo, VERITAS, and the VERITAS logo are trademarks or registered trademarks of Symantec Corporation or its affiliates in the United States and certain other countries. Additional company and product names may be trademarks or registered trademarks of the individual companies and are respectfully acknowledged.
FORWARD LOOKING STATEMENTS:
This press release contains forward-looking statements, including forecasts of future revenue, deferred revenue and GAAP and non-GAAP earnings per share, expected industry patterns, and other financial and business results that involve 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 by this press release. Such risk factors include, among others: the sustainability of recent growth rates, particularly in consumer products; the anticipation of the growth of certain market segments, particularly enterprise security; the positioning of Symantec's products in those segments; the competitive environment in the software industry; general market conditions; fluctuations in currency exchange rates; changes to operating systems and product strategy by vendors of operating systems; and whether Symantec can successfully develop new products and integrate 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 sections of Symantec's recently filed Form 10-Q. Symantec assumes no obligation to update any forward-looking information contained in this press release.
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