Earnings Preview: McAfee

McAfee (MFE) is expected to report Q3 earnings after the market close on Thursday, October 29 with a conference call scheduled for 4:30 pm ET.

Guidance

The consensus estimate is 61c for EPS and $486.61M for revenue, according to First Call. Guidance for Q3 provided by management on their last earnings call is for EPS 58c-62c and revenue $475M-$495M.

Analyst Views

Goldman is estimating Q3 revenue, EPS and cash flow from operations, or CFFO, of $489M, 61c and $105M, within the company’s guidance range. They expect inorganic bookings growth of 15%, yoy, higher than security industry competitors as McAfee continues to take share, but a slowing from last quarter’s 26%. Goldman's checks for the quarter were mostly positive, showing market share gains are continuing. The firm expects to see strength in McAfee’s consumer business with the renewed Dell (DELL) OEM deal signed, and a continued focus on competitive wins in enterprise security. Cashflow could be negatively impacted by tougher pricing on consumer deals.

Looking forward: Goldman estimates Q4 revenue of $529M, and EPS of 66c, well above the Street at $507M and 63c. Goldman's 2009 estimates are $1.93B and $2.43 versus the Street’s $1.91B and $2.40.

On the conference call: investors will be looking for an update on McAfee’s acquisition of MX Logic, a cloud-based security company, which closed during Q3, in terms of its revenue contribution. Updates also expected on the company's renewed partnership program and the release of ePO 4.5. McAfee shares have been trading higher lately on unconfirmed takeover speculation, investors will be curious to hear commentary on that.