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Symantec Beats Estimates on Security, Backup

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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