Symantec Beats as Spending Rebounds

(Updated with Symantec's fourth-quarter guidance and comments from the firm's CFO)

Mountain View, Calif. (TheStreet) -- Symantec(SYMN Quote) beat analyst estimates in its second-quarter results after the market closed Wednesday, boosted by increased spending on cybersecurity.

The software maker posted revenue of $1.48 billion, down from $1.52 billion in the same period last year, but above the $1.43 billion predicted by Wall Street. Excluding items, Symantec earned 36 cents, compared to 37 cents in the prior year's quarter, but more than the 33 cents forecast by analysts.

"Execution against our key priorities in a tight spending environment enabled us to achieve solid results," said Enrique Salem, the Symantec CEO, in a statement released after market close. "In particular, we were pleased with the strength in the consumer segment and with the initial progress in SMB security."

Analysts had predicted that Symantec, like Apple(AAPL Quote), Google(GOOG Quote), and Amazon(AMZN Quote), would reap the benefits of an improved IT spending environment, which proved correct.

"We are encouraged by the signs of stabilization in the markets we serve and are confident that we will continue to see gradual improvement over the next few quarters," added Salem, in his statement.

Shares of Symantec, which competes with ArcSight(ARST Quote), McAfee(MFE Quote) and Microsoft(MSFT Quote), surged in response to the results. The company's shares gained $1.02, or 6.48%, to reach $16.75.

Symantec's consumer business, which represents just under a third of total revenue, grew 6% year over year on both an actual and adjusted currency basis, whereas its storage and server management division declined 9%, or 8% adjusted for currency. Security and compliance sales fell 3% compared to the prior year's quarter, or 1% taking currency fluctuations into account. Revenue from services dipped 1%, but was flat adjusted for currency.

In another indication of a stabilizing economy, Symantec issued guidance in line with Wall Street's estimate, predicting fourth-quarter revenue between $1.48 billion and $1.51 billion, compared to analysts' forecast of $1.5 billion. Excluding items, the software company expects earnings between 36 cents a share and 37 cents a share. Analysts surveyed by Thomson Financial had expected earnings of 37 cents a share.

"The December quarter-end is a big renewal quarter for us," James Beer, the Symantec CFO, told TheStreet, in a phone interview. "Usually in our business, there's a seasonal uptick in the second half of the year versus the first half of the year and we would expect that to continue."

However, Beer acknowledged that the December "budget flush" is unlikely to reach the levels of previous years.

The software specialist also announced that its board of directors has approved a $1 billion share repurchase program.

"That's very much a reflection of the confidence that we have in our ongoing cash flow generation," explained Beer. "We're very pleased to announce that."

-- Reported by James Rogers in New York