McAfee Beats Estimates, Acquires Reconnex

| About: McAfee Inc. (MFE)

McAfee on Thursday acquired data loss prevention company Reconnex, inked distribution pacts with HP and Toshiba and reported better than expected second quarter earnings.

The company said it acquired Reconnex, which makes technology that automates data protection, for $46 million. McAfee said Reconnex will allow it to deploy data loss protection systems faster and offer customers better security bundles. The deal will close in the third quarter.

Separately, McAfee said that it will bundle its Internet Security Suite on Toshiba laptops in an exclusive deal that gives consumers a 30-day trial. McAfee and Symantec often duke it out for desktop PC real estate. McAfee also announced that it will provide a 60-day trial of its Total Protection Software on “select HP commercial desktop computers and notebooks.” The offer targets small business customers.

McAfee also reported second quarter net income of $47.8 million, or 30 cents a share, on revenue of $396.8 million, up 26 percent from a year ago. Excluding charges earnings were $83.8 million, or 52 cents a share. Wall Street was expecting earnings of 45 cents a share. Corporate revenue was $240 million in the quarter with consumer sales of $157 million.

The outlook for the third quarter and 2008 was solid. For the third quarter, McAfee sees earnings per share of 46 cents a share to 50 cents a share compared to estimates of 48 cents a share. For 2008, McAfee also upped its outlook.

McAfee’s results follow Symantec’s quarterly financials. The message: Security vendors aren’t being dinged by tight IT budgets.