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8/16/2011
10:18 AM
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Symantec Reports Record First Quarter Fiscal 2012 Results

Symantec achieved better than expected first quarter results in each of its key financial metrics

MOUNTAIN VIEW, Calif. – July 27, 2011 – Symantec Corp. (Nasdaq: SYMC) today reported the results of its first quarter of fiscal year 2012, ended July 1, 2011. GAAP revenue for the fiscal first quarter was $1.653 billion, up 15 percent year-over-year and up 9 percent after adjusting for currency.

“The current threat landscape continues to be toxic and targeted. In addition, information is growing at unprecedented rates. As a result, customers increasingly understand the value of our unique portfolio and are expanding their commitment to Symantec. For the fourth consecutive quarter, we exceeded all of our key financial metrics,” said Enrique Salem, president and chief executive officer, Symantec. “We are capitalizing on new growth opportunities in cloud, mobile and virtualization and will continue to deliver new solutions to help both consumers and enterprises securely access and use information across multiple devices and platforms.”

“Our third consecutive quarter of double digit bookings growth resulted in the strongest June quarter revenue, deferred revenue and operating cash flow in Symantec’s history,” said James Beer, executive vice president and chief financial officer, Symantec. “Our record results were driven by strength in backup, data loss prevention and consumer as well as ongoing stability in the storage and availability management business. In addition, our authentication business once again exceeded expectations and delivered its fourth consecutive quarter of better than expected results.”

GAAP Results: GAAP operating margin for the first quarter of fiscal year 2012 was 17.1 percent compared with 13.5 percent for the same quarter last year. GAAP net income for the fiscal first quarter was $172 million compared with net income of $161 million for the year-ago period. GAAP diluted earnings per share were $0.22 compared with $0.20 for the year ago quarter, an increase of 10 percent year-over-year.

GAAP deferred revenue as of July 1, 2011, was $3.689 billion compared with $2.998 billion as of July 2, 2010, up 23 percent year-over-year and up 17 percent after adjusting for currency. Cash flow from operating activities for the first quarter of fiscal year 2012 was $503 million compared with $335 for the year ago period, an increase of 50 percent year-over-year. Symantec ended the quarter with cash, cash equivalents and short-term investments of $2.297 billion.

Non-GAAP Results: Non-GAAP operating margin for the first quarter of fiscal year 2012 was 27.0 percent compared with 26.5 percent for the same quarter last year. Non-GAAP net income for the first quarter was $309 million compared with $284 million for the year-ago period, an increase of 9 percent year-over-year. Non-GAAP diluted earnings per share were $0.40 compared with earnings per share of $0.35 for the year-ago quarter, an increase of 14 percent year-over-year.

During the first quarter of fiscal year 2012, Symantec repurchased 10 million shares for $198 million at an average price of $18.98. Symantec has $679 million remaining in the current board authorized stock repurchase plan.

Business Segment and Geographic Highlights

For the quarter, Symantec’s Consumer segment represented 32 percent of total revenue and increased 11 percent year-over-year (5 percent after adjusting for currency). The Security and Compliance segment represented 28 percent of total revenue and increased 31 percent year-over-year (24 percent after adjusting for currency). The Storage and Server Management segment represented 36 percent of total revenue and increased 14 percent year-over-year (7 percent after adjusting for currency). Services represented 4 percent of total revenue and declined 20 percent year-over-year (24 percent after adjusting for currency), as expected due to the company’s move to a partner-led consulting model. Growth rates for the Security and Compliance and Services segments include the impact of moving Managed Security Services from the Services segment into the Security and Compliance segment.

International revenue represented 52 percent of total revenue in the first quarter of fiscal year 2012 and increased 21 percent year-over-year (8 percent after adjusting for currency). The Europe, Middle East and Africa region represented 29 percent of total revenue for the quarter and increased 16 percent year-over-year (2 percent after adjusting for currency). The Asia Pacific/Japan revenue for the quarter represented 18 percent of total revenue and increased 29 percent year-over-year (15 percent after adjusting for currency). The Americas, including the United States, Latin America and Canada, represented 53 percent of total revenue and increased 11 percent year-over-year on an actual and currency-adjusted basis.

Acquisition Highlights

For the quarter, the VeriSign security business performed better than expected across all metrics, generating revenue of $74 million ahead of our $70 million forecast. The earnings per share accretion of half a penny was a penny and a half better than expected. In addition, $3 million of revenue was realized from the Clearwell acquisition, which was completed ahead of schedule in the June quarter.

Second Quarter Fiscal Year 2012 Guidance

Guidance assumes an exchange rate of $1.43 per Euro for the September 2011 quarter versus the actual weighted average rate of $1.30 and an end of period rate of $1.38 per Euro for the September 2010 quarter.

For the second quarter of fiscal year 2012, ending Sept. 30, 2011, revenue is estimated between $1.655 billion and $1.675 billion, up 12 to 13 percent year-over-year as reported.

GAAP diluted earnings per share are estimated between $0.21 and $0.22. Non-GAAP diluted earnings per share are estimated between $0.38 and $0.39.

Deferred revenue is expected to be in the range of $3.485 billion and $3.515 billion, up 12 to 13 percent year-over-year as reported and in line with seasonal patterns.

Conference Call

Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss the results from the fiscal first quarter 2012, ended July 1, 2011, 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.

About Symantec

Symantec is a global leader in providing security, storage and systems management solutions to help consumers and organizations 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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