Updated from 4:29 p.m. EDT

Strong sales to virus-wary consumers helped

Symantec

(SYMC) - Get Report

increase revenue by 28% in the fourth quarter, but a heavy charge kept earnings essentially flat with the year-ago quarter.

Shares of Symantec lost 23 cents, or 1%, after hours to $19.70 a share, after gaining 50 cents during the day. But it isn't clear if the loss was related to the earnings announcement; some analysts think investors are currently ignoring fundamentals until the merger closes.

The company admitted that final regulatory approval of its $13.5 billion merger with

Veritas Software

(VRTS) - Get Report

is taking longer than expected, but Symantec CEO John Thompson said, "I haven't given up hope of closing in June."

Symantec posted a profit of $120 million, or 16 cents a share. In the same quarter last year, the antivirus software maker earned $117 million, or 16 cents a share, the company said after the closing bell Wednesday. Revenue rose 28% to $713 million.

Excluding a charge of $54 million, or 7 cents a share, for repatriating cash, the company earned $186 million, or 25 cents a share.

Analysts polled by Thomson First Call were expecting a profit of 24 cents a share on revenue of $708 million.

The consumer business was up 34% to $360.9 million and represented 51% of total revenue. Enterprise security, Symantec's next largest business, grew 23% to $255.9 million.

Looking to the first quarter, the company expects revenue of $700 million to $720 million. At the midpoint of guidance, earnings per share are estimated at 23 cents; on a pro forma basis, the company expects a profit of 25 cents.

Analysts were forecasting a 23-cent profit on sales of $701.5 million.

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Symantec and Veritas, which sells software to manage data storage, agreed to merge in December 2004. The deal is expected to close during the current quarter, pending shareholder approval and approval of the companies' proxies by the

Securities and Exchange Commission

, which earlier in the year raised no objections to the merger itself.

The deal has not been well received on Wall Street, and investor fears over its success have weighed on both stocks. Both companies' shares have moved in tandem this year, and are off about 25%, more than twice the decline of the

Nasdaq Composite

, which before Wednesday is down 11% on the year. When the all-stock deal was announced in December 2004, it was valued at $13.5 billion, but the drop in share value has eroded its worth. The company declined to reveal the merger's current worth.

Also looming is potentially serious competition from

Microsoft

(MSFT) - Get Report

, which is expected to release an aggressively priced antivirus product by the end of the year.

The giant software company may also deliver a full suite-based security offering that may include antivirus, antispyware, a beefed up firewall and other features as well as add more security features in the next generation of its Windows operating system, said Goldman Sachs analyst Rick Sherlund. In a note to clients, Sherlund said he thinks the suite won't roll out until the first half of 2006. Goldman has an investment banking relationship with Microsoft.

Asked about the Microsoft threat during a call with analysts, Thompson said he hoped his much larger rival "will realize it should partner with us, and not compete." But if it doesn't, he said, "We are prepared to compete on the basis of technology, the strength of our relationships with distribution partners and tens of millions of consumers." How will he beat Bill Gates and Co.? "It's not appropriate to show our hand," he said.

When Veritas reported its first-quarter earnings Tuesday, CEO Gary Bloom said his company was being

deliberately conservative in its guidance for the June quarter. Commenting on the guidance, Merrill Lynch analyst Edward Maguire said he believes Veritas was giving itself a cushion against merger-related sales disruptions in the quarter. "We think

investor sentiment continues to be governed by concerns over disruption following the close of the merger -- hence results from either company is likely to have minimal impact," he wrote in a note to clients. Merrill Lynch does not have a banking relationship with Symantec.

Speaking to the issue of merger-related disruption, Thompson conceded that a few bumps are inevitable, but said the two companies have already developed significant integration plans, including a 24-month product roadmap. "Gary Bloom and I continue to believe that the merger is in the best interests of our shareholders," he said.