Weak Outlook Sinks Symantec

Security software maker Symantec (SYMC) was dropping Tuesday after the company issued soft estimates for its fiscal third and fourth quarters.

For the third quarter ended Dec. 29, Symantec expects revenue of $1.29 billion to $1.31 billion, down from its prior guidance of $1.315 billion to $1.345 billion. The company's adjusted revenue will probably be $1.30 billion to $1.32 billion, also short of its previous outlook.

The third-quarter earnings of 10 cents to 11 cents a share now estimated will miss Symantec's earlier prediction of 14 cents to 15 cents. Profits excluding items should be 24 cents to 25 cents, below the 29 cents to 30 cents the company had previously forecast.

"We experienced weaker-than-expected performance in our Data Center Management business," said John W. Thompson, Symantec's chairman and chief executive, in a press release. "Our recognized revenue for the quarter was also impacted by a greater proportion of enterprise maintenance contracts, which resulted in higher deferrals than we expected. Additionally, with the implementation of our new ERP system, we incurred higher costs than expected."

Looking ahead to the fiscal fourth quarter, Symantec is anticipating revenue of $1.24 billion to $1.27 billion and earnings of 4 cents to 6 cents a share.

On an adjusted basis, the company is expecting revenue of $1.25 billion to $1.28 billion and a profit of 18 cents to 20 cents. Analysts surveyed by Thomson Financial were calling for earnings of 32 cents and revenue of $1.4 billion for the fourth quarter.

Shares of Symantec were losing 7.1% to $19.02 in premarket trading. Symantec will release its actual results for the fiscal third quarter after the market closes on Jan. 24.

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