Symantec Rising After Report - TheStreet

Updated from Oct. 22

Shares of security software maker


(SYMC) - Get Report

were rising after the company reported it handily beat Wall Street's second-quarter earnings estimates.

Symantec blew by EPS estimates by a hefty 8 cents, thanks to a rash of virus and worm outbreaks during the summer and strong enterprise sales. The company also announced a 2-for-1 stock split.

In recent trading, the Cupertino, Calif.-based company was higher by $1.30, or 2.8%, to $65.79.

On Wednesday Symantec, known for its Norton antivirus software, reported GAAP net income of $83.4 million, or 49 cents a share, in the fiscal second quarter, which ended in September. That compared with net income of $52 million, or 33 cents a share, in the same period a year earlier.

Excluding charges, Symantec said it earned pro forma net income of $91.1 million, or 53 cents a share, in the second quarter, compared with pro forma net income of $59.8 million, or 38 cents a share, a year earlier. Wall Street analysts polled by Thomson First Call expected Symantec to post pro forma net income of 45 cents a share.

Revenue climbed 31.8% to $428.7 million from $325.3 million a year earlier, easily surpassing the Wall Street consensus estimate of $401.4 million.

Symantec's guidance called for second-quarter revenue ranging from $375 million to $395 million and second-quarter earnings of 41 cents a share, based on the midpoint of revenue guidance.

"It was a stellar quarter across the board with strong performance in all regions," Chairman and CEO John Thompson said in a statement released before the market close.

Symantec expects third-quarter revenue to range from $440 million to $460 million, third-quarter earnings of 56 cents a share and GAAP earnings of 52 cents a share, based on the midpoint of revenue guidance. Wall Street analysts were forecasting third-quarter revenue at $446 million and earnings of 56 cents a share.

For the second time, Symantec boosted its guidance for the full fiscal year. The company expects revenue to total about $1.73 billion, pro forma earnings of $2.10 per share and GAAP earnings of $1.90 per share. Analysts' estimates called for full-year revenue of $1.692 billion and earnings of $2.02 a share.

After beating first-quarter estimates in July, Symantec raised its revenue guidance to $1.665 billion, its pro forma earnings outlook to $1.96 a share and its GAAP earnings target to $1.82 a share for the full year.

Symantec said shareowners of record at the close of business on Nov. 5 will be issued one additional share of common stock for each share owned as of that date. The company anticipates that the additional shares resulting from the split will be issued on or about Nov. 19.

Symantec said its consumer business grew 56% and represented 45% of total revenue. Some growth was expected given the onslaught of blended viruses in August. The remainder of revenue came from the company's enterprise business, which Symantec has been trying to grow in anticipation of a still-elusive slowdown in consumer sales.

Shares of Symantec fell $2.95, or 4.4%, to close Wednesday at $64.42. Shares climbed up to $64.93 in after-hours trading follow the release of the earnings report.