Symantec Shares Slump On Guidance

Symantec swings to a third-quarter profit, but its shares drop on weak guidance for the fourth quarter.
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CUPERTINO, Calif. (

TheStreet

--

Symantec

(SYMC) - Get Report

swung to a profit in its

third-quarter

results, boosted by its consumer business but saw shares slump on weak fourth-quarter guidance.

The software maker, which is the biggest player in security software, earned 37 cents a share on net income of $300 million, compared with a loss of $8.25 a share and $6.82 billion in the prior year's quarter. Symantec's income, however, was boosted by $78.5 million, or 10 cents a share, thanks to a ruling by the U.S. Tax Court regarding a tax assessment for Veritas Software for 2000 and 2001.

Excluding items, Symantec predicted fourth-quarter earnings between 36 cents a share 37 cents a share, compared with analysts' estimate of 37 cents.

Investors were unimpressed by Symantec's guidance; the company's stock fell 81 cents, or 4.35%, to $17.80 in extended trading.

Symantec reported third-quarter revenue of $1.548 billion, up slightly from $1.51 billion in the same period of last year, and above analysts' estimate, which was also $1.51 billion. Excluding items, Symantec earned 40 cents a share, down from 42 cents in the same period last year. Analysts surveyed by Thomson Reuters had predicted earnings of 37 cents a share.

James Beer, the Symantec CFO, told

TheStreet

that the company's consumer business enjoyed strong growth during the third quarter, with revenue increasing 7% year over year.

The CFO also added that his firm is seeing "good traction" in its enterprise security business, where it faces a

stiff challenge

from rival

McAfee

(MFE)

.

Although a much smaller company,

McAfee

has become something of a Wall Street

favorite

and was one of the

TheStreet's

top tech picks

for 2009 .

Symantec, however, has been ramping up the

pressure

on its hard-charging rival, recently clinching a deal with

Comcast

(CMCSA) - Get Report

in which the communications giant will offer its software to high-speed Internet customers. Previously, Comcast had offered McAfee's software.

The company's security and compliance business grew 3% year over year during the fourth quarter, although Symantec's storage and server management division saw its sales slip 4% compared to the prior year's quarter.

-- Reported by James Rogers in New York