Symantec (SYMC) is expected to report Q1 earnings after the market close on Wednesday, July 27, with a conference call scheduled for 5:00 pm ET.
The consensus estimate is 37c for EPS and $1.59B for revenue, according to First Call. Last quarter, Symantec reported a solid "beat and raise" driven by accelerating bookings growth, of up 23% year-over-year. Analysts expect similar dynamics for Q1. Management provided Q1 guidance on its last earnings call of adjusted EPS 36c-37c, on revenue of $1.57B-$1.59B. CLSA believes Symantec is well positioned to at least meet and possibly beat its revenue and non-GAAP EPS estimates of $1.586B and 37c, which are in-line with consensus.
CLSA thinks Symantec will benefit from favorable enterprise spending trends -- as evidenced in VMware (VMW), Microsoft (MSFT) and IBM’s (IBM) results -- with contribution from the VeriSign security assets. The firm expects compliance, DLP and other growth products to help offset secular challenges faced by the data management business in transition to cloud-based architectures. While consumer PC softness is a lingering concern, CLSA thinks Symantec is poised to "meet and possibly beat" conservative forecasts.
Looking forward: CLSA thinks there is likely opportunity for management to guide modestly above consensus. The firm is currently forecast $1.606B and 37c for Q2 of FY12 versus consensus of $1.62B and 38x. CLSA maintains a Buy rating and $24 target price.