Symantec Shares Rise, Allay Fear of Missing Goals
Symantec Corp., a maker of software that detects computer bugs, rose 14% after the company allayed concern that it would miss fiscal first-quarter earnings and revenue estimates.
Symantec shares rose $3.19 to close at $25/50 in Nasdaq trading. The Cupertino-based company said it will earn 40 cents a share before charges, in line with analyst estimates of 41 cents.
Symantec, which makes the Norton line of software that protects against bugs and viruses on personal computers, had told some analysts it would have a hard time meeting forecasts because of slowing PC sales. The company, which is locked in a heated battle with Network Associates Inc., issued the earnings forecast to help ease those concerns.
“The perception was that Symantec was going to miss the quarter and miss it big,” said Aaron Scott, an analyst at Sands Brothers & Co. Scott expected sales of $156 million for the quarter.
Revenue will be $153 million for the period that ended July 3, Symantec said, up 13% from the $135 million posted a year ago. The company earned 32 cents a share in the year-earlier period.
Network Associates said last month it would buy Dr. Solomon’s Group to bolster its security programs as it seeks to take on Symantec’s Norton software.
Symantec said it wanted to allay concern that the company would miss earnings and revenue estimates.
“There was speculation that we would blow the quarter big-time,” said Chief Financial Officer Howard Bain. “Rather than allow rumor to drive the stock further, we decided” to issue a forecast.
Bain said the company’s goal to increase sales 20% calendar year-over-year is still on course.
“The stock has been dropping for a while,” said S & P Equity Group analyst Brian Goodstadt, who has a “buy” rating on the stock and expected the company to earn 40 cents a share on revenue of $160 million. “The company said as recently as three weeks ago that the retail consumer market was weak.”
Sales picked up in June, possibly because of the release of Microsoft Corp.’s Windows 98 operating system, he said. When consumers buy a new operating system to run their personal computers, they also tend to buy additional software applications, he said.
The company will report earnings July 16.
