Symantec Reports Strong Quarterly And Year-End Earnings

Security sector leader Symantec reported financial results today that show how formidable the company continues to be despite rampant consolidation and the emergence of new competitors in its sector.

The company reported results for the fiscal fourth quarter and the fiscal year ended April 1, 2005, posting revenue for the quarter of $713 million, a 28 percent increase over the $556 million it reported the same quarter last year. Revenue for fiscal year 2005 was $2.6 billion, 38 percent more than the $1.9 billion Symantec registered in 2004.

Despite this robust growth, the company's quarterly earnings per share held steady year-over-year. EPS were $0.16, the same as the same quarter last year. But EPS for the year were $0.74, compared to $0.54 for 2004. Symantec's net income for fiscal year 2005 was $536 million, up from $371 million in 2004.

In a conference call with analysts and the media, Symantec chairman and CEO John Thompson complimented his employees and the company's legion of partners.

"Our team remains focused and continues to deliver outstanding results around the world," he said. "Double-digit growth rates in all segments and all geographies underpinned the success of the quarter and the fiscal year. Our geographic reach is unmatched by anyone in the industry, our business has never been stronger, and the addition of Veritas will make us even better."

He added that the company will continue to invest in services as it sees ways to enhance its solutions, and that the company's overall breadth positions Symantec well to fend off competitors, even Microsoft, which has begun to pursue the security space more aggressively than ever.

"I don't want to show our hand on Microsoft just now, but based on our technology and our relationship with partners, we feel strongly that we can compete with them," Thompson said. "Our technology is stronger than everything we've heard from Microsoft so far. Our hope is that they wake up and realize they're better off partnering with us than competing with us."

Symantec's worldwide enterprise business -- including enterprise security, enterprise administration and services--represented 49 percent of total revenue in the fourth quarter and grew 22 percent year-over-year. Symantec's enterprise security business represented 36 percent of total revenue and grew 23 percent; the enterprise administration business represented 11 percent of total revenue and grew 14 percent; and the services business represented 2 percent of total revenue and grew 60 percent.

Symantec's consumer business represented 51 percent of total revenue and grew 34 percent. International revenue represented 52 percent of total revenue in the fourth quarter and grew 25 percent over the same quarter last year.

The company is projecting first-quarter 2005 revenue to fall between $700 million and $720 million, with GAAP earnings per share estimated to be $0.23. But the company was careful to say that this guidance does not reflect whatever impact the merger with Veritas will have.

Among the quarterly highlights were the signing of 401 contracts worth more than $100,000 each, including 109 worth more than $300,000 each and 22 worth more than $1 million each. Sixty-one percent of these deals included multiple Symantec enterprise products and services, an increase of 109 percent from the same quarter last year.