Symantec second-quarter profit beats estimates, shares rise
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(Reuters) – Cybersecurity firm Symantec Corp beat analysts’ estimates for second-quarter profit and revenue on Thursday, easing investor concerns following three consecutive quarters of disappointing results and forecast cuts.
The Symantec logo is pictured on a screen June 13, 2016. REUTERS/Thomas White/File Photo
Symantec shares jumped more than 8 percent in extended trade following the announcement. The stock ended up 3.2 percent at $18.73.
“This was a big step in the right direction for Symantec. Investors will view this as an inflection point quarter,” said Daniel Ives, analyst at Wedbush Securities.
Revenue from Symantec’s consumer security division rose 8.5 percent to $601 million and accounted for more than half of the company’s total revenue. Analysts on average were expecting revenue of $582.4 million in the segment, according to IBES data from Refinitiv.
The company’s chief financial officer Nicholas Noviello pointed to higher earnings per user and cross-selling to its direct customer base as beneficial for its consumer business.
In its enterprise business, which encompasses its work for businesses rather than individual consumers, the company reported revenue of $574 million, missing estimates of $585.9 million.
On a conference call with analysts, executives expressed concerns over “momentum loss” in enterprise, but said third and fourth quarters are seasonally the biggest for the segment.
“We expect to recapture momentum in our enterprise security business,” chief executive Gregory Clark said.
Symantec shares have lost more than a third of their value this year, pressured by an investigation over its accounting practices and weak revenue forecasts. In August, the company said it will cut 8 percent of its workforce worldwide.
The company’s loss narrowed to $8 million, or 1 cent per share, in the quarter ended Sept. 28 from a loss of $12 million, or 2 cents per share, a year earlier.
On an adjusted basis, the company earned 42 cents per share. Revenue fell to $1.18 billion from $1.24 billion.
Analysts on average had expected earnings of 33 cents per share, on revenue of $1.15 billion.
Reporting by Angela Moon in New York and Munsif Vengattil in Bengaluru; Editing by Phil Berlowitz and Sonya Hepinstall