CUPERTINO, Calif. – Oct. 25, 2006 – Symantec Corp. (Nasdaq: SYMC) today reported results for the second quarter of fiscal year 2007, ended Sept. 29, 2006. GAAP revenue for the quarter was $1.262 billion and non-GAAP revenue was $1.275 billion. Non-GAAP revenue grew 7 percent over the comparable period a year ago.
GAAP Results: GAAP net income for the fiscal second quarter was $123 million, compared to a net loss of $251 million for the same quarter last year. Diluted earnings per share was $0.12, compared to a loss of $0.21 per share for the same quarter last year.
Non-GAAP Results: Non-GAAP net income for the fiscal second quarter was $259 million, compared to $273 million for the same quarter last year. Non-GAAP diluted earnings per share was $0.26, compared to diluted earnings per share of $0.23 for the same quarter last year. For a detailed reconciliation of our GAAP to non-GAAP results, please refer to the attached consolidated financial statements.
“Our results for the September quarter met the low end of our expectations,” said John W. Thompson, Symantec chairman and chief executive officer. “With the most challenging part of the fiscal year behind us, I believe our business remains healthy and we are poised to achieve our full-year financial targets.”
For the quarter, Symantec’s consumer business represented 31 percent of total revenue and grew 12 percent year-over-year. The enterprise business represented 69 percent of the total revenue and grew 5 percent year-over-year. The enterprise segment includes results from the Data Center Management, Security and Data Management, and Services groups.
International revenues represented 50 percent of total revenue in the second quarter and grew 10 percent year-over-year. The Americas, including the United States, Latin America, and Canada, represented 55 percent of total revenue and increased 5 percent year-over-year. The Europe, Middle East, and Africa region represented 31 percent of total revenue for the quarter and grew 8 percent year-over-year. Asia Pacific/Japan revenue for the quarter represented 14 percent of total revenue and grew 11 percent year-over-year.
GAAP deferred revenue at the end of the September 2006 quarter was $2.228 billion. Non-GAAP deferred revenue at the end of the quarter reached $2.250 billion, growing almost 30 percent compared to the September 2005 quarter.
December Quarter Forecast
For the December 2006 quarter, GAAP revenue is estimated between $1.315 billion and $1.345 billion. GAAP diluted earnings per share for the December quarter is estimated between $0.14 and $0.15.
Non-GAAP revenue for the December quarter is estimated between $1.325 billion and $1.355 billion. Non-GAAP diluted earnings per share is estimated between $0.29 and $0.30.
Fiscal Year 2007 Forecast
Symantec is reaffirming its previously announced guidance for the fiscal year ending March 2007. GAAP revenue is estimated in the range of $5.1 billion to $5.3 billion. GAAP diluted earnings per share for the fiscal year ending March 2007 is estimated between $0.46 and $0.56.
Non-GAAP revenue is estimated in the range of $5.2 billion to $5.4 billion. Non-GAAP diluted earnings per share is estimated between $1.06 and $1.16.
- Symantec signed 280 contracts worldwide worth more than $300,000 each, including 66 worth more than $1 million each, during the quarter. Of those 280 contracts, 76 percent were multiple product deals.
- Symantec signed new or extended agreements with the following customers: Kelly Services, Inc., a Fortune 500 provider of staffing solutions; Lee Enterprises, Inc., the country's fourth largest newspaper group with 56 dailies and online sites in 23 states; Wintrust Financial Corp., a financial services holding company with assets in excess of $8 billion; Marathon Petroleum Co. LLC, the nation's fifth largest petroleum refiner; Texas Children's Hospital, an internationally recognized full-care pediatric hospital nationally ranked in the top five among children’s hospitals; DeVry University, which provides rigorous, career-oriented undergraduate and graduate degree programs; The Florida Turnpike Authority, which manages a user-financed, limited-access toll road that runs 312 miles, through 11 counties in Florida; Wayne St. University, the nation's 28th-largest enrollment university headquartered in Detroit, Michigan; SEI Investments Co., a leading global provider of outsourced asset management, investment processing and investment operations solutions; Liaoning Mobile, Zhejiang Mobile and Guangdong Mobile, subsidiaries of China Mobile Ltd., the leading mobile services provider in China; PT Excelcomindo Pratama, Tbk, the preferred information and communication technologies provider in Indonesia; and Freehills, which provides commercial legal advice across Asia Pacific.
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss the fiscal second quarter, ended Sept. 29, 2006, and to review guidance for the fiscal year 2007. 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.
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 40 countries. 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 projections of future revenue and earnings per share for the third quarter and year of fiscal 2007, and projections of deferred revenue, amortization of acquisition related intangibles and stock-based compensation. 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: 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. Additional information concerning these and other risk factors is contained in the Risk Factors section of our Form 10-K for the year ended March 31, 2006 and our Form 10-Q for the quarter ended June 30, 2006. We assume no obligation to update any forward-looking information contained in this press release.
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) 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/center.html.