Network Associates Guides Higher

Updated from Dec. 1.

Network Associates (NET Quote - Cramer on NET - Stock Picks), the security-software vendor that has had to restate more than five years of financial results, said late Monday that its earnings next year could top analyst estimates.

In a filing with the Securities and Exchange Commission, Network Associates said it expects 2004 pro forma earnings excluding charges to range from 67 cents to 72 cents a share, offering potential upside to the consensus estimate of 67 cents a share, according to Thomson First Call. The Santa Clara, Calif.-based company said it expected revenue in 2004 to range from $975 million to $1.005 billion, with the midpoint roughly in line with the analyst consensus estimate of $985.4 million.

Shares of Network Associates were up 60 cents, or 4.5%, to $14.06 early Tuesday. The stock rose 7 cents, or 0.5%, to $13.46 in Monday's regular trading session.

Network Associates CEO George Samenuk and COO and CFO Stephen Richards will present the 2004 forecast Tuesday at the Credit Suisse First Boston Technology conference, the company said in its filing.

Network Associates also stated that it expects typical seasonality to continue in 2004, with first-quarter revenue accounting for 22% of total annual sales, the second quarter making up 24%, the third quarter making up 25%, and the fourth quarter ringing in 29% of annual sales.

Network Associates also released a new breakdown of revenue by segment for the past seven quarters to reflect changes in the company's recently restated financial results.

Network Associates, which is under investigation by the SEC and U.S. attorney's office, restated financial statements for more than five years to reflect a more conservative way of recognizing revenue. The restatements covered periods under previous management, which left amid charges of channel stuffing.