Symantec Vexed by Veritas

Symantec's(SYMC Quote) $13.5 billion acquisition of Veritas 18 months ago continues to haunt the security giant -- and Wall Street continues to say, "We told you so."

The Cupertino, Calif., security software maker cut its profit and sales outlook for the fiscal third quarter Tuesday, blaming the miss on the weak performance of its data center management business, which largely comprises Veritas products.

For the third quarter, Symantec now expects revenue of $1.29 billion to $1.31 billion, down from its earlier guidance of $1.31 billion to $1.34 billion. Adjusted revenue will probably be $1.30 billion to $1.32 billion, again lower than its previous outlook. Symantec also lowered its outlook for the fiscal fourth quarter.

Symantec's current woes aren't so much about the general environment for IT security products as much as they are about the company's struggles to bring Veritas completely into its fold without disrupting business.

Disappointed investors pushed Symantec's stock down by more than 8% in recent trading to 2 1/2-month lows. Shares of Symantec were off $1.72 to $18.76.

Despite the increasing convergence of storage and security -- storage company EMC(EMC Quote) last year bought security player RSA -- investors were never fond of the idea of Symantec and Veritas merging.

Shares of Symantec traded at $32 on Dec. 7, 2004, a week before the Veritas deal was announced. A week after the merger's announcement, the stock was trading around $25 and it has never recovered.