Symantec CEO Tells Turnaround Tale

MOUNTAIN VIEW, Calif. ( TheStreet -- Symantec ( SYMC) CEO Enrique Salem has overseen an impressive turnaround at the software maker, which reported strong third-quarter results on Wednesday.

Weighed down by execution issues until just a couple of years ago, Symantec has now met or exceeded Wall Street's revenue and earnings estimates for the last six quarters. Shares of the software specialist, which competes with EMC ( EMC) in storage and McAfee, now part of Intel ( INTC), in security, have climbed almost 8% this year.

Symantec CEO Enrique Salem

In an interview, Salem cited strength in data-loss prevention, authentication, managed security services and backup offerings as boosting the third-quarter results. "Those four areas continue to do well for us," he explained. "We're executing very well with our security portfolio."

As for Symantec's broader turnaround, the CEO attributed the improved performance to two key initiatives; an intense marketing focus on data and identity protection and a revamped sales strategy.

"Sales execution is something that we have absolutely improved," he explained. "We're able to do a great job of cross-selling our portfolio; during the third quarter 41% of all sales over $1 million included products from both segments -- security and storage."

Thanks to its cross-selling efforts, Symantec's large deals also hit an all-time high during the quarter. In the enterprise side of its business, the company clinched 674 transactions valued at more than $300,000, a hike of 24% compared to the prior year's quarter. Some 78% of these transactions included multiple products.

The execution story certainly resonated with analysts, who put out a flurry of research notes Thursday.

"The company continues to build a solid track record of being able to more consistently deliver positive results," noted Todd Weller, an analyst at Stifel Nicolaus, who has a buy rating on Symantec. "We believe this was evidenced by continued solid growth in large transactions marked by transactions of over $300,000."

"Overall, it appears that the company is seeing improved execution in the field, an encouraging trend we have seen play out over the last year," added Daniel Ives, an analyst at FBR Capital Markets. "Although the macro environment remains choppy, we believe Symantec is poised to see improved deal flow on the heels of resilient security growth and good execution." This trend bodes well for healthy bookings growth for the next few quarters, he added.

Ives maintained his market outperform rating on the company's stock.

There is, however, clearly still room for improvement over in Mountain View. Revenue from Symantec's Storage and Availability Management Business, for example, was down 10% year over year, although analysts see sufficient strength elsewhere in the company's product portfolio.

"While the storage management business continues to be a drag on results (down 10% year over year), the company generally executed well, saw stability in its Consumer segment and drove strong results in its Security & Compliance business, which was up 17% year over year," noted Pat Walravens, an analyst at JMP Securities.

Walravens also maintained his market outperform rating on Symantec.

Symantec's board also authorized a $1 billion share-repurchase program after market close on Wednesday.

Interested in more on Symantec? See TheStreet Ratings' report card for this stock.

-- Written by James Rogers in New York

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