Updated from 5:21 p.m. ESTVeritas ( VRTS) had a veritably healthy fourth quarter, as the software company's sales and earnings topped estimates by a long shot. Investors reacted mildly to the news, sending the company's shares up just 4 cents, or less than 1%, in after-hours trading to $25.21. Mountain View, Calif.-based Veritas earned $128.7 million, or 30 cents a share, in the just-completed quarter, compared to $190.62 million, or 43 cents a share, in the year-ago period. But earnings in the fourth quarter of 2004 included $9 million, or 2 cents a share, worth of non-cash charges. And including similar charges, the year-ago period benefited from a $91 million, or 20 cents a share, net gain due to a favorable tax settlement. Year-over-year, the company's revenue swelled 14.4% in the fourth quarter to $574.4 million. Polled by Thomson First Call, analysts were expecting the company to earn 25 cents a share, excluding the amortization charges, on $541.8 million in sales. In its third-quarter report, the company predicted it would earn 22 cents to 24 cents a share -- 24 cents to 26 cents a share excluding charges -- on sales ranging from $530 million to $550 million. Veritas officials predicted the company would earn 18 cents to 20 cents a share in the first quarter on sales ranging from $525 million to $540 million. But those results include $15 million to $20 million -- about 3 cents to 5 cents a share, assuming the company's share count stays the same -- of charges related to the company's planned merger with Symantec ( SYMC). Excluding those charges, then, the company expects to earn between 21 cents to 25 cents a share. In the first quarter, analysts are expecting Veritas to earn 23 cents a share excluding charges on $518.3 million in sales.
Last year, Veritas earned $100.1 million, or 22 cents a share, on a GAAP basis on revenue of $485.8 million. Veritas' earnings report followed the close of regular trading on Thursday. At the bell, the company's stock was up 16 cents, or 0.6%, to $25.17. Earlier on Thursday, Veritas' proposed merger with Symantec cleared a major hurdle, as the time period for the U.S. government to object under federal antitrust laws expired. The deal still needs to be approved by the European Union and other overseas jurisdictions as well as by shareholders of both companies. Neither company has yet set a date for a vote. When the
all-stock deal was announced on Dec. 16, it was valued at $13.5 billion. Since then, Symantec shares have tumbled and the deal is now worth about $11.2 billion. Despite the sharp drop in the value of the merger with Symantec, CEO Gary Bloom said during an interview that he is committed to seeing it through. "I don't think Wall Street understands this deal, which is an anomaly, since our customers, partners and employees all do." Asked if the merger is in jeopardy, Bloom said he doesn't think it is and there's no floor (that is a low stock price) that would automatically kill it. However, it must be ratified by the shareholders of both companies. Bloom and John Thomson, the CEO of Symantec, will begin a series of meetings with investors in February, the second since the merger was announced.