IT security company


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needs to get a move on.

The company

missed guidance for the third quarter ended December 2006, which sent the stock plunging nearly 8%, and issued a soft outlook for the fourth quarter.

In addition, Symantec's data center management division is under pressure, and growth in its security and data products for business seems to have stalled. Yet Symantec isn't giving up on big-ticket acquisitions.

In January, the company said

it would buy Altiris, a systems management specialist, for $830 million, despite investors' ongoing questions about the value of the $10.25 billion Veritas merger in July 2005.

With scant good news to trumpet and several downgrades in the quarter, Symantec must deliver the numbers when it reports its fourth-quarter results after the bell Wednesday.

"The market can't take any more bad news -- or perceived bad news -- from this company," says Peter Hofstra, vice president and portfolio manager with AIC Funds, which has Symantec in its holdings.

"We need evidence they are winning corporate deals and that the consumer business is strong," Hofstra says.

Even an in-line quarter and guidance that meets expectations aren't likely to get the stock going up now, says Hofstra.

For the fourth quarter, analysts polled by Thomson Financial are expecting earnings of 20 cents a share on revenue of $1.26 billion. In the next or first quarter, analysts forecast earnings of 24 cents a share on $1.28 billion in revenue.

The Cupertino, Calif.-based company's stock hasn't recovered from its post- third-quarter earnings report and has sunk 16.5% since the beginning of the year.

"People are waiting for something substantive to move on," he says. "They are waiting for strong news out of the company, and it will take a disappointment, a big beat or very strong guidance to get the stock going."

Shares of Symantec closed up 23 cents, or 1.3%, to $17.83 Tuesday.

Symantec's consumer security division is expected to perform well in the fourth quarter. Despite


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entry into that market with its lower-priced Windows OneCare, Symantec's consumer business has held its own.

In the third quarter, consumer products grew 24% year on year, and rose 4% sequentially.

In the current or fourth quarter, revenue could be up 12% year on year, estimates Heather Bellini, an analyst with UBS, which has an investment-banking relationship with the company.

That's where Hofstra will be watching for signs on how Symantec's latest security-software product in its flagship line, Norton 360, is faring in the market.

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The company said it shipped

Norton 360, which among other things includes antivirus, antispam, firewall and backup features, in late February.

The product, at $79.99 for a year's use for up to three PCs, is substantially more expensive than Windows OneCare at $49.95, and


( MFE) PC Protection Plus product, which offers basic security and backup, at $49.99.

But Norton 360 offers better security protection and user experience when compared with rival products, and the software has scored well on technical review sites.

"Norton 360 seems like a strong product, and we want to see that subscription rates are strong and the company can maintain a stable franchise," says Hofstra.

The outlook for Symantec's security and data-center management products for businesses, however, is grim. In the third quarter, data-center management was down 8% annually and flat sequentially.

Security and data management in the third quarter grew 3% year on year and 7% sequentially.

In the fourth quarter, revenue from the data-center management division could decrease 19% year on year, estimates Bellini.

Symantec needs to do all it can to fend off reinvigorated rivals such as McAfee and

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, whose recent robust earnings results are likely to turn up the heat on Symantec.

In addition, closing in on two years now, the Veritas buy continues to be a sore point with investors. Symantec bought Veritas because the company saw advantages to melding storage and security. However, the deal hasn't delivered, says Hofstra.

"We felt the synergies have not come through in growth and fundamentals," Hofstra says. "It's time to deliver on contract announcements there."

Symantec has also been trying to weather the stream of senior executives departing for seemingly better opportunities. In the March quarter, the company

lost Jeremy Burton, group president of the security and data management group, and has been reshuffling since.

Meanwhile, Hofstra would also like Symantec to be in a position to recognize a greater chunk of its deferred revenue.

Excluding items, deferred revenue at the end of the December 2006 quarter was $2.49 billion and grew $500 million, or almost 25%, compared with the same quarter a year before.

"We would like to see more of the deferred revenue flow through to the income statement in the fourth quarter," says Hofstra.

In any case, it's unlikely the stock will go much lower. Symantec has been aggressively defending its stock through a share buyback program, points out Hofstra.

At January end, the company's board approved a $1 billion share repurchase program, effective immediately.

Over the past eight quarters, Symantec has repurchased nearly $6 billion of its shares.