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Symantec Shares Tank on Tepid Guidance

NEW YORK (TheStreet) -- Symantec (SYMC) shares tanked after it reported its second-quarter results, weighed down by weaker-than-expected outlook as the software maker attempts to get back on track.

The Mountain View, Calif.-based firm, which announced a major restructuring effort earlier this year, reported revenue of $1.64 billion, down 4% from the prior year's quarter, or 3% adjusted for currency. Analysts surveyed by Thomson Reuters had forecast sales of $1.685 billion.

Excluding items, Symantec earned 50 cents a share, up from 45 cents in the same period last year. Analysts surveyed by Thomson Reuters were looking for earnings of 44 cents a share.

On a GAAP basis, the company's operating margin was 15.1%, down from 17.5% in the prior year's quarter. Excluding items, the company's operating margin was 27.6%, up from 27%.

For the third quarter, Symantec expects sales between $1.63 billion and $1.67 billion and earnings between 41 cents and 43 cents a share. Wall Street expects sales of $1.79 billion and earnings of 51 cents a share.

For fiscal 2014, Symantec expects revenue to decline 3% to 4% in constant currency.

Investors were unimpressed by Symantec's numbers, pushing the company's stock down 13.4% to $21.32 in extended trading. Symantec shares closed Wednesday's session down 2.34%.

"Since announcing our strategy in January, we made significant changes that will help us become more successful at delivering value to customers and partners," said Steve Bennett, the Symantec CEO, in a statement released after market close. "We've reallocated resources to develop new integrated offerings, split the sales organization into renewals and new business teams, and simplified our management structure."

"While this was a challenging quarter in our transition year, we expect our actions to translate into growth. We remain committed to our FY15-FY17 targets and are confident that we are on the right track," he added.

During the second quarter, revenue from Symantec's User Productivity and Protection business, declined 3% year over year, or 2% adjusted for the effects of currency, to $719 million. Revenue from Symantec's Information Security business slipped 2%, or 1% adjusted for currency, to $316 million. Information Management revenue declined 5% year over year, or 6% after adjusting for currency, to $602 million.

--Written by James Rogers in New York.

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