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McAfee Beats Estimates

But stock option charges hit quarterly profit.

Updated from 4:51 p.m. EST



, after issuing fourth-quarter earnings, said that the special committee reviewing its stock option practices has completed its investigation and has turned it over to management for review and certification by auditors.

The investigation should be complete this year, said Dale Fuller, McAfee interim CEO and President. McAfee has already estimated a pretax cost of $100 million to $150 million as restatement charges.

The No. 2 IT security company, after Symantec, also said it is likely to announce a new CEO for the company in the next few months.

In the wake of the options investigation, McAfee's previous

CEO George Samenuk resigned in October , after six years at the company's the helm.

"We are down to a short list of probably six or seven candidates for the position, and I think we're getting there very quickly," Fuller told analysts during an earnings conference call late Thursday.

Though the company attributes its fourth-quarter profit drop to the stock options charges, it beat analysts' earnings and revenue estimates.

McAfee said net income for the quarter fell to $35 million, or 21 cents a share, from $38.6 million, or 23 cents a share, a year earlier.

Excluding items, McAfee earned 36 cents a share, beating Thomson Financial expectations of 34 cents a share.

Revenue grew to $305.2 million from $253.4 million, beating analysts' expectations of $290.7 million.

Shares of McAfee were off 12 cents, or 0.4%, to $29.50 in extended trading.

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"The better-than-expected performance for the fourth quarter was because of our total protection solutions for enterprise and small and medium business, and consumer online offerings," said Fuller.

Corporate revenue rose 18% to $173, million driven by sales improvements in its network protection and management businesses

Consumer revenue was $132 million, a 24% gain over the same period last year. The company's total subscriber base at year end grew 42% to 24.4 million.

Consumer bookings were, however, slightly affected slightly in the quarter because McAfee was not the default or recommended antivirus software by


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in North America during that period -- as it was a year-ago quarter, said Fuller.

For the second half of its second quarter, McAfee expects to regain its status as the default antivirus program for Dell customers.

Overall, bookings grew to $388 million, an increase of 5% over the fourth quarter of 2005, said McAfee.

For the first quarter of 2007, McAfee expects revenue of $280 million to $300 million, bracketing analysts' expectations of $296.7 million.

Earnings per share before items, is expected to be 31 cents to 36 cents, compared with expectations of 35 cents a share. Including items, the company projects earnings of 17 cents to 22 cents a share.

For the full year 2007, McAfee expects revenue of $1.2 billion to $1.27 billion, and earnings of $1.45 to $1.55 a share. Analysts were expecting revenue of $1.22 billion and net income of $1.49 a share for the year.

The Santa Clara, Calif., company said it will bet big this year on security-risk management and data-leak prevention, two areas of increasing concern for businesses.

The company also said it plans to aggressively distribute SiteAdvisor, a private company that McAfee acquired last year for its technology that gave a security rating to search results.

"We look to push the number of downloads for that into tens of millions as we go forward," said Fuller.