McAfee, Compellent Rise Above the Mire

Despite the dark clouds hanging over the economy, the need for data storage and security software is giving some tech stocks a lift.

Security specialist McAfee(MFE Quote), for example, reported impressive fourth-quarter results Thursday, as did data storage firm Compellent(CML Quote).

McAfee's shares surged $1.59, or 5.24%, to $31.75 Friday after it reported fourth-quarter revenue of $424 million, a 19% increase on the same period last year, beating analysts' estimate of $421 million. Excluding charges, McAfee earned 53 cents on net income of $82.5 million, up from 46 cents and $75.1 million in the prior year, and in line with consensus estimates.

The Santa Clara, Calif.-based company, which was one of the TheStreet.com's top tech picks for 2009, was buoyed by deals to bundle its software with PCs, and by booming North American sales, which grew 25% year over year.

"We continue to believe that the security market, while not immune, should hold up well on a relative basis and that McAfee is one of the best-positioned companies in this sector," wrote Todd Weller, an analyst at Stifel Nicolaus, in a note released Friday.

The analyst pointed to McAfee's aggressive attempts to forge deals with PC manufacturers and solid sales execution as evidence of its strength.

"Despite a weak consumer backdrop, McAfee's consumer business also continues to exhibit solid trends and we walked away from the quarter with increased confidence in McAfee's ability to sustain reasonable growth," wrote Welller.

With economic downturns typically producing an upsurge in criminal activity, firms such as McAfee and its rival Symantec(SYMC Quote) are well positioned to lock down business and consumer data. Symantec, for example, beat analysts' earnings and revenue estimates in its recent third-quarter results, thanks largely to its booming services business.