Security software manufacturer McAfee had a 9% drop in Q4 profit and will fail to meet a NYSE extension of its annual report deadline. Profit for the quarter ended Dec. 31 fell to $35 million ($0.21/share) from $38.6 million ($0.23) a year earlier. Sales rose 20% to $305.2 million, ahead of Street forecasts of $291 million. The results are only preliminary because the company will be restating its financials in the wake of a scandal in which up to $150 million in options were improperly accounted for. CEO George Samenuk, who resigned when the scandal broke, will receive a $1.4 million bonus and cash payout. McAfee will not be able to file its 2006 annual report by the revised NYSE deadline of March 16 and will thus be subject to late filer regulations. The delayed filing has resulted in the possibly temporary cancellation of a $246 million stock repurchase plan that was supposed to last through October 2007. For Q1 2007, McAfee is projecting EPS of $0.17-0.22 on sales of $280-300 million. Excluding expenses, it forecasts EPS of $0.31-0.36. Analysts have forecast $0.35 EPS on $291 million in revenue.
Sources: MarketWatch, Business Week, The Street.com, Reuters. Conference call transcript: Q4 2006
Commentary: Options Scandal Investigations Heat Up With McAfee, CNET Firings, McAfee: Takeover Target With Options Issue Behind It?, Barron's: Picks and Pans Among Tech Stocks
Stocks/ETFs to watch: McAfee, Inc. (MFE). Competitors: CA, Inc. (NASDAQ:CA), Microsoft Corp. (NASDAQ:MSFT), Symantec Corp. (NASDAQ:SYMC). ETFs: PowerShares Dynamic Networking (NYSEARCA:PXQ), Internet HOLDRs (NYSE:HHH)
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