Virus Plague Boosts Symantec

Updated from April 28

Symantec ( SYMC) boosted year-over-year fourth-quarter sales by 43% and beat Wall Street's earnings expectations by a penny, the antivirus software vendor reported after Wednesday's close.

The Cupertino, Calif., company also raised guidance for the June quarter and the rest of the fiscal year.

Caught in the general air of negativity surrounding tech stocks Wednesday, shares sank after hours. But a raft of positive comments published Thursday apparently convinced investors of the obvious -- the virus plague will continue to enrich the company. In recent trading, the stock was up $1.18, or 2.5%, to $48.29.

In the recently completed March quarter, the company earned a profit of $117 million, or 33 cents a share, compared to a profit of $68 million, or 21 cents a share, in the year-ago quarter, according to generally accepted accounting principles. Sales were $556 million, up from $390 million.

Excluding charges, Symantec earned $126 million, or 35 cents a share. Analysts polled by Thomson First Call were expecting a pro forma profit of 34 cents on sales of $526 million.

The rising tide of viruses and other cyberthreats goaded consumers into spending more on antivirus products, CFO Greg Myers said in an interview. Sales of consumer-oriented products grew 62% year over year and constituted 48% of overall revenue in the quarter. Sales of corporate products grew 29%, accounting for 52% of revenue.

The greater percentage of consumer sales hurt pro forma gross margins, which slipped 20 basis points year over year, to 82.5%.

Helped by the weakening dollar, international sales grew by 48% and represented 53% of total revenue. Currency effects, the company said, added $20 million net to the bottom line.

Revenue for fiscal 2004 was $1.87 billion, a 33% increase over fiscal 2003. Net income for the year was $371 million, or $1.07 per share, compared to $248 million, or 77 cents a share, in 2003, according to GAAP.

Looking forward, the company raised revenue guidance for the June, or first fiscal quarter, by $40 million. Sales should range from $525 million to $555 million. Pro forma earnings per share are expected to be 33 cents at the midpoint of revenue guidance. GAAP earnings are expected to be 3 cents lower.

For the year, the company forecasts revenue of $2.34 billion, an increase of $160 million over prior guidance and higher than Wall Street's expectations of $2.22 billion. Pro forma earnings are expected to be $1.46; analysts had forecast $1.38 per share.

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