Despite a net loss that widened sequentially,
reported beating pro forma earnings and revenue estimates and said it was recovering from the downturn.
The storage software stock also increased its revenue projections for the first quarter to between $365 million and $370 million, up from Wall Street consensus estimates of $348 million gathered by Thomson Financial/First Call. The software shop is the latest in a string of storage-related companies to beat expectations, confirming the sense that the industry is on the way to recovery.
"We are optimistic that the worst of the economic downturn is behind us," said CEO and President Gary Bloom, who also became chairman this year. "The software segment of storage market continues to be one of the robust sectors of the technology market."
Mountain View, Calif.-based Veritas recorded a fourth-quarter loss of $204 million, or 51 cents a share, compared with a $162 million loss, or 40 cents a share, in the third quarter, and a $125 million loss, or 31 cents a share, the same period a year ago.
Excluding certain items, Veritas registered net income of $64 million, or 15 cents a share, compared with pro forma net income of $51 million, or 12 cents a share, in the third quarter and $83.9 million, or 19 cents a share, a year earlier. Analysts were expecting earnings of 13 cents a share on overall revenue of $359 million, according to Thomson Financial/First Call. Fourth-quarter revenue increased to $374 million from $340 million in the third quarter. That compares with $370.1 million in revenue during the same period a year ago.
For the full fiscal year 2001, Veritas registered a $651 million loss, or $1.63 a share, on $1.5 billion revenue. Pro forma income, excluding certain items, came in at $282 million, or 67 cents a share. That compares with pro forma net income of $263 million, or 60 cents a share, on $1.2 billion in revenue a year earlier. Analysts were expecting full-year earnings of 65 cents a share on $1.5 billion in revenue.
Prior to its earnings announcement Tuesday, Veritas shares fell 1.07% to close at $46.15. After it reported earnings, shares fell 3.9% in after-hours trading.
Veritas, whose software helps firms recover lost or damaged data, is among a handful of companies that was expected to benefit in the aftermath of the Sept. 11 terrorist attacks on the U.S.
Monday, ABN Amro analyst George Godfrey upgraded Veritas to buy from hold, writing in a research note that the market is rebounding from 2001's depressed levels. Godfrey's company has no underwriting relationship with Veritas. A.G. Edwards analyst Shebly Seyrafi was less bullish Tuesday morning, predicting a "gradual" recovery. Seyrafi rates Veritas a strong buy, and his firm has done no banking for Veritas.
Last week, other firms in the storage space foreshadowed Veritas' encouraging results. Last Tuesday
, which makes adapters for storage networks, reported its first sequential revenue growth since the IT slowdown at the beginning of last year, and rival
beat consensus estimates by a penny.
On Thursday, computer storage giant
reported a miserable 42% drop in revenue from a year ago but recorded double-digit sequential growth in all its major product areas and geographies. The company managed to beat earnings estimates by 4 cents.
Veritas' sales also received a boost from a
new partnership announced in December with
Global Services to have Big Blue's army of consultants hawk the software shop's wares. Paul Sallaberry , Veritas executive vice president of worldwide field operations, said IBM Global Services has closed several transactions, including one multimillion-dollar deal, for Veritas. He said international sales accounted for 31% of total revenue, a 2% increase from a year ago.