Earnings Jump at VeriSign, Symantec

Times Staff Writer

Growing worry over identity theft, viruses and other online problems helped boost quarterly earnings at two big Internet security companies, Symantec Corp. and VeriSign Inc.

Symantec, one of the largest digital security companies, said Wednesday that net income in the fiscal second quarter jumped to $136 million, or 38 cents a share, from $83 million, or 24 cents, a year earlier. Sales rose 44% to $618 million.

VeriSign, which authenticates transactions over the Web, said it swung to a third-quarter profit of $40 million, or 16 cents a share, from a year-earlier loss of $31 million, or 13 cents. Sales rose 21% to $325 million.

Both companies raised their forecasts for the coming months.

"You have increased vulnerabilities through worms and viruses that are forcing people to secure their systems," said Robert Owens, an analyst at Pacific Crest Securities. "You've seen great success by Symantec and VeriSign."

Symantec got an assist in the quarter ended Sept. 30 by raising the price of Norton AntiVirus software for consumers. Revenue from business customers increased 29%.

Although no single Internet threat garnered as much attention as Blaster and other worms did last year, the total number of threats is increasing, said Symantec Chief Executive John Thompson. In addition, the average time between when a software vulnerability is discovered and when a program exploits that weakness is shrinking, to fewer than six days.

Thompson said the company was aided by its acquisition of Brightmail, which makes a spam blocker. He said the company would soon announce new tools for fighting spyware, which can be detected by its current products but not easily removed.

For the quarter ending Dec. 31, Symantec said it expected revenue of $645 million to $665 million and earnings per share of about 41 cents. The Cupertino, Calif.-based company also announced a two-for-one stock split.

Symantec shares fell 93 cents to $54.43 in regular Nasdaq trading, then climbed to $54.80 in extended trading. Earnings were announced after the markets closed.

Mountain View, Calif.-based VeriSign said $74 million of its sales in the quarter came from its June acquisition of Jamba, which coordinates cellphone downloads in Europe.

"That was more than double what we expected," said VeriSign Chief Executive Stratton Sclavos.

Sclavos said Jamba services should come to the U.S. in the first six months of next year.

He raised VeriSign's fourth-quarter forecast to $345 million in sales and 20 cents a share in earnings from $300 million and 17 cents.

VeriSign shares fell 16 cents to $22 in regular Nasdaq trading, then rose to $22.39 in after-hours trading after the announcement.

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