NEW YORK (
is moving forward with momentum after reversing some negative sentiment going into the quarter -- but one analyst notes that some investors are leery of McAfee's business maneuvers.
For the first quarter, Stifel Nicolaus analyst Todd Weller says he sees strong cash-flow generation for McAfee, healthy collections from strong fourth-quarter bookings and momentum on its consumer and corporate businesses.
McAfee itself expects net revenue of $500 million to $520 million, GAAP (Generally Accepted Accounting Principles) net income of 30 cents to 36 cents per share and non-GAAP net income of 60 cents to 64 cents per share in the first quarter. This is roughly in line with Wall Street's earnings forecast of 63 cents a share on revenue of $511.7 million.
Weller said there had been negative sentiment going into the quarter after McAfee competitor
reported an "okay quarter" with some growth issues -- but this has gotten better. "People translated that to McAfee ... and sentiment had gotten pretty negative. Some of that has reversed now."
McAfee's "very strong" fourth quarter cash flow was certainly one factor that helped ease the negative sentiment, Weller points out. However, there remains some debate over whether all the company's investment into the consumer -- PC-OEM (original equipment manufacturer) front is paying off. Investors want to know whether all this money spent is going to result in a return, and there is also some concern over how a McAfee pursuit of an
partnership would pan out.
The company currently pays PC manufacturers and Internet service providers to carry trial versions of its programs, according to reports.
are among them.
Weller says there is currently significant maturity in the security technology space, given that many companies already have anti-virus software. But there are growing segments, including data protection and leak prevention. Security information management -- which enables the collection of security information from all networks and brings them to one place to get a central view of what's going on -- "that's a hot area," Weller said.
And that's an area that McAfee could play in going forward, but it would require acquisitions, Weller said. Another upside for the security technology space involves upgrades as consumers move to Windows 7, he said.
For the fourth quarter, the company reported GAAP and non-GAAP earnings of 34 cents and 64 cents a share respectively, in line Wall Street's consensus estimates. Non-GAAP earnings increased 20% year-over-year.
Revenue reached $525.7 million, an increase of 24% year-over-year.
McAfee stock finished the trading day Tuesday up 1.5% at $40.40, while Symantec ended up 1.5% at $17.10. Hewlett-Packard ended up 2% at $49.40, and Dell finished the day higher, at $14.10, up 2.2%.
-- Reported by Andrea Tse in New York
Follow TheStreet.com on
and become a fan on
Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.