Symantec's Sales Dip on Short-Term Contracts

CUPERTINO, Calif. (TheStreet) -- Security software specialist Symantec(SYMC) missed analysts'first-quarter sales and profit estimates, as customers focused their attention on short-term contracts.

The Cupertino, Calif.-based firm brought in sales of $1.43 billion in the quarter, down from $1.65 billion in the same period last year, and below its own guidance of $1.45 billion.

Adjusted for currency and the extra week in the firm's fiscal first quarter, however, Symantec's revenue came in at $1.44 billion, although this was still below Wall Street's forecast. Analysts surveyed by Thomson Reuters had expected Symantec to post revenue of $1.49 billion.

Confronted with heightened competition and a tough economy, Symantec said that customer buying patterns have changed.

"On the enterprise side, the customers are spending on shorter-term contracts, and that did result in some reduced new license revenue," Symantec CEO Enrique Salem told TheStreet.com in an interview. "[But] our earnings came in within our guided range because we did a lot of expense management, and we expect that to continue."

Including a 3-cent benefit from the extra week, Symantec earned 34 cents a share on net income of $285 million, down from 40 cents a share and $342 million in the prior year's quarter, but in line with the low end of the company's guidance. Analysts, however, had forecast earnings of 35 cents a share.

On a diluted basis, Symantec earned 9 cents a share on net income of $73 million, down from 20 cents a share and $170 million in the prior year's quarter.