Symantec's Blowout Quarter

Updated from 4:38 PM EST

SAN FRANCISCO -- IT security giant Symantec(SYMC Quote) blew past analysts' expectations for the third quarter and raised its guidance for the fiscal year on the strength of its services division and improvements in its international operations.

Net income for the quarter rose 13% to $132 million, or 15 cents a share, compared with $117 million, or 12 cents a share, the year-before.

Excluding charges, profit rose to $292 million, or 33 cents a share, compared with $251 million, or 26 cents a share, for the same quarter last year.

Revenue grew 15% to $1.53 billion, compared with $1.33 billion a year ago.

Analysts polled by Thomson Financial were expecting earnings of 28 cents a share on revenue of $1.45 billion.

"We are continuing to improve our operational results and our key products including backup, endpoint protection and storage -- all of that we are investing in have started to pay off," said John Thompson, CEO of Symantec.

International revenue, which represented 53% of total revenue in the quarter, was 21% higher than a year ago. The Europe, Middle East and Africa region represented 35% of total revenue for the quarter and grew 26% year over year. Revenue from the Asia-Pacific and Japan markets grew 19% for the quarter.

Deferred revenue in the quarter reached $2.9 billion, up 12% compared with $2.58 billion a year ago.

Shares of Symantec closed up 24 cents, or 1.6%, to $15.26 on Wednesday. The stock rose another $1.74, or 10.4%, in after-hours trading.

For the fourth quarter, Symantec estimates revenue between $1.51 billion and $1.55 billion and EPS between 33 cents and 35 cents, excluding charges. Analysts are expecting EPS of 30 cents a share on revenue of $1.48 billion.

Despite fears that a slowdown in the economy could choke IT spending by businesses, Symantec remains confident that the company's products will continue to find favor among customers.

"We are not immune from a global economic slowdown but we are encouraged by the strength of our portfolio," said Thompson. "Security and storage are still top areas of performance and investment for businesses and our confidence is reflected in our guidance."

For the fiscal year, Symantec guided revenue in the range of $5.9 billion to $5.94 billion.

Excluding charges, EPS is estimated between $1.24 and $1.26, the company said. Including charges, EPS is likely to be between 46 cents and 48 cents a share

Analysts are expecting EPS of $1.16 on revenue of $5.79 billion for the fiscal year ended March 2008.

For the third quarter, Symantec's consumer segment represented 29% of total revenue and grew 8% year-over-year. The security and data management segment represented 29% of total revenue and grew 9% from last year. The data center management segment represented 29% of total revenue and grew 11%.

Services represented 6% of total revenue and grew 40%. The Altiris segment, which includes revenues from the company's recent acquisition of software management company Altiris and such Symantec products such as Ghost, pcAnywhere and LiveState Delivery, represented 7% of total revenue.

Symantec acquired Altiris for $830 million in January 2007. Following the acquisition, Symantec said it would start reporting results from the Altiris side of its business every quarter.