Symantec Faces McAfee Challenge

CUPERTINO, CALIF. (TheStreet) -- Investors will be eagerly awaiting Symantec's(SYMC) first-quarter results late Wednesday for signs of heightened competition in the security software market.

The Cupertino, Calif.-based firm, which competes with McAfee(MFE), Microsoft(MSFT) and ArcSight(ARST), reports its first-quarter numbers after market close.

At least one analyst expects to see Symantec lose market share, particularly in its larger customer accounts.

"In the backdrop of a weak economy, spending on security and compliance still appears soft," wrote Katherine Egbert, an analyst at Jefferies & Company, in a note released earlier this week. "We think intense competition from McAfee on larger deals could further the top-line pressure."

Analysts surveyed by Thomson Reuters expect Symantec to post revenue of $1.49 billion and earnings of 35 cents a share.

Despite recording record revenue in fiscal 2009, Symantec saw its consumer business decline 1% year-over-year. The security specialist also missed Wall Street's fourth-quarter revenue forecast, underlining the challenges facing the software sector.

Jefferies & Company's Egbert nonetheless expects that server and storage management software will boost Symantec's first-quarter revenue, even if sales of security and compliance offerings are weak.

"Storage and server remains a bright spot for the company," she wrote, forecasting revenue of $542 million, above analysts' prediction of $538 million.

Investors will also be looking for more details on Symantec's product strategy when it releases its results. Fall typically marks the launch of new software products, and the Cupertino, Calif.-based firm is planning enhancements to its Norton products.