Symantec Seeks a Catalyst

IT security company Symantec(SYMC Quote) needs to get a move on.

The company missed guidance for the third quarter ended December 2006, which sent the stock plunging nearly 8%, and issued a soft outlook for the fourth quarter.

In addition, Symantec's data center management division is under pressure, and growth in its security and data products for business seems to have stalled. Yet Symantec isn't giving up on big-ticket acquisitions.

In January, the company said it would buy Altiris, a systems management specialist, for $830 million, despite investors' ongoing questions about the value of the $10.25 billion Veritas merger in July 2005.

With scant good news to trumpet and several downgrades in the quarter, Symantec must deliver the numbers when it reports its fourth-quarter results after the bell Wednesday.

"The market can't take any more bad news -- or perceived bad news -- from this company," says Peter Hofstra, vice president and portfolio manager with AIC Funds, which has Symantec in its holdings.

"We need evidence they are winning corporate deals and that the consumer business is strong," Hofstra says.

Even an in-line quarter and guidance that meets expectations aren't likely to get the stock going up now, says Hofstra.

For the fourth quarter, analysts polled by Thomson Financial are expecting earnings of 20 cents a share on revenue of $1.26 billion. In the next or first quarter, analysts forecast earnings of 24 cents a share on $1.28 billion in revenue.

The Cupertino, Calif.-based company's stock hasn't recovered from its post- third-quarter earnings report and has sunk 16.5% since the beginning of the year.