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Symantec Beats Estimates on Security, Backup

Stocks in this article: SYMC

NEW YORK ( TheStreet) -- Symantec (SYMC) eased past Wall Street's estimates in its first-quarter results, released after market close on Tuesday, boosted by strength in its security and backup businesses.

The software maker reported revenue of $1.71 billion, a year-over-year increase of 3% in constant currency. Analysts surveyed by Thomson Reuters were looking for sales of $1.64 billion.

Excluding items, Symantec earned 44 cents a share, up 7% on the prior year's quarter, well above analysts' estimate of 36 cents a share.

Investors responded positively to the numbers, pushing Symantec's shares up 4.64% to $25.48 in extended trading.

Revenue from Symantec's Information Management business, which includes the company's backup and recovery products, grew 4% year-over-year to $641 million on an actual and currency adjusted basis.

"Customers are increasingly looking to our integrated backup appliance - it's easier for them to install and operate in their networks," said James Beer, the Symantec CFO, during a phone interview with The Street. The devices, he noted, offer both data backup and de-duplication capabilities.

Revenue from Symantec's User Productivity & Protection business, which includes endpoint security and management, encryption, and mobile, dipped 1% year over year to $732 million. Adjusting for the effects of currency, revenue at the segment rose 1%.

"We saw strength on our endpoint security business, both enterprise and Norton," said Beer. "We saw a particularly strong growth rate on the authentication business - that's Web site security verification."

Symantec, which is in involved in a major restructuring effort, gave fiscal second-quarter guidance that was below analysts' expectations. It said it expects sales to be between $1.65 billion and $1.69 billion, below Wall Street's forecast of $1.71 billion.

Excluding items, the Mountain View, Calif.-based firm expects earnings between 42 cents and 44 cents a share. Analysts surveyed by Thomson Reuters were looking for earnings of 45 cents a share.

"In Q2 we're rolling out our revised go-to-market model," said Beer. "We have set up a renewals organization that will just be focused on bringing in the renewals and our field sales folks will just be focused on bringing in new business."

Symantec nonetheless affirmed its fiscal 2014 guidance for year-over-year revenue growth between 0 and 2% on a constant currency basis.

--Written by James Rogers in New York.

>To submit a news tip, send an email to: tips@thestreet.com.

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