McAfee Infected With Sell Virus

SANTA CLARA, Calif. (TheStreet) -- McAfee(MFE Quote) shares headed southward Friday as investors digested the firm's third-quarter profit slump.

The company's shares plunged $2.84, or 6.49%, to $40.91, outpacing the broader retreat in tech stocks that saw the Nasdaq decline 2.37%.

Despite bringing in record revenue and broadly meeting Wall Street's estimates, McAfee's earnings were impacted by costs related to its MXLogic acquisition and other charges, falling to 23 cents a share on net income of $36.8 million. The company earned 31 cents a share on net income of $48.8 million in the prior year's quarter.

McAfee, which was one of TheStreet's top tech picks for 2009, nonetheless posted good numbers. The software maker, which competes with Symantec(SYMC Quote) and Microsoft(MSFT Quote), grew its consumer business 12.5% year over year and cited healthy demand both in the U.S. and overseas.

The company has also renewed its deal to sell software pre-installed on Dell(DELL Quote) PCs and is reaping the benefits of a growing cybersecurity market.

"We still believe in the story," wrote Katherine Egbert, an analyst at Jefferies, in a note released Friday, citing the company's high growth and market share gains against the likes of Symantec. Egbert also reiterated her 'Buy' rating and $49 price target for McAfee.

Something of a darling of the analyst community, McAfee is increasingly seen as a major threat to market share leader Symantec.

"Looking ahead to 2010, we're very encouraged by the opportunities we see," said McAfee CEO Dave DeWalt, during an earnings conference call late Thursday. "We believe McAfee is uniquely positioned to continue to deliver industry-leading growth and to increase our market share."