Symantec Is A Value Trap
Paulo Santos • 19 Comments
Paulo Santos • 19 Comments
Symantec's Renaissance Is On The Way
Hunter Wolf • 26 Comments
Hunter Wolf • 26 Comments
Thu, Apr. 28, 10:15 AM
- Symantec (SYMC -5.5%) now expects to report FQ4 (calendar Q1) revenue of $873M and EPS of $0.22. That's below prior guidance of $885M-$915M and $0.24-$0.27, and a consensus of $901.2M and $0.25.
- Enterprise security revenue guidance has been cut to $467M from $480M-$500M; consumer security guidance is now at $406M vs. a prior $405M-$415M.
- The company also announces CEO Michael A. Brown will be stepping down once a successor has been named. The board has begun a search to find one. An Office of the CEO (contains several execs) has been formed to aid with the CEO search and transition.
- Regarding the FQ4 warning, Symantec blames "a shift in enterprise security customer buying preferences is resulting in less license revenue during the quarter and more revenue being deferred to future periods." The company has been losing share for some time to smaller/faster-growing security software and services firms.
- FQ4 results are due on the afternoon of May 12. Symantec's analyst day (was set for May 26) has been postponed.
Fri, Feb. 5, 5:11 PM
- Symantec (NASDAQ:SYMC) closed up 3% after posting an FQ3 beat, issuing in-line FQ4 guidance, disclosing a $500M Silver Lake investment, announcing a $4/share special dividend and a 50% regular dividend cut, boosting the size of its total capital return plan, and unveiling plans for fresh cost cuts. The gains came in spite of a 3.3% Nasdaq decline.
- Possibly helping: The WSJ has reported well-known tech activist Elliott Management has "amassed a big stake" in the security software/services firm. The paper adds Elliott supports the Silver Lake deal and yesterday's other announcements.
- Separately, CEO Michael Brown promised Symantec will be "very judicious" in pursuing acquisitions with its Silver Lake and Veritas deal proceeds. Brown previously suggested Symantec plans security acquisitions following the Veritas deal's closing.
- FBR's Dan Ives (Market Perform rating) is cautiously optimistic about Symantec's turnaround efforts. "We believe the confluence of M&A, aggressive buybacks and a tighter operating model finally puts this company on the right path after a decade of pain. This remains a work-in-progress name, but we are now starting to be more optimistic that better days could be ahead for a ‘leaner and more focused’ Symantec."
Thu, Feb. 4, 4:38 PM
- Symantec (NASDAQ:SYMC) announces in tandem with its FQ3 report P-E firm Silver Lake is investing $500M in the company, and that the company is issuing a $4/share ($2.3B) special dividend. The dividend is payable on March 22 to shareholders on record as of March 8.
- At the same time, Symantec's regular quarterly dividend is being cut in half to $0.075/share to "reflect reduced projected domestic cash flow, following the sale of Veritas, and the one-time special dividend." In addition the company is now targeting $400M/year in cost savings (with the help of job cuts?) by the end of FY18 (ends March '18).
- The news comes less than a week after Symantec closed the sale of its Veritas storage software unit to Carlyle, a deal that yielded after-tax proceeds of $5.3B. The total size of Symantec's capital return program (includes the dividend, as well as buybacks) is now $5.5B, up from a prior $4B+.
- The program is set to be finished in March 2017, and will be financed through a mixture of the Veritas proceeds, Silver Lake's money, available cash, and new debt. Silver Lake is buying 2.5% convertible senior notes due 2021. The notes sport a conversion price of $21/share. Silver Lake managing partner Ken Hao is joining the board.
- FQ4 guidance is in-line: Revenue of $885M-$915M and EPS of $0.24-$0.27 vs. a consensus of $901.7M and $0.25. FQ3 enterprise security revenue fell 3% Y/Y to $495M (+1% exc. forex); consumer security revenue fell 10% to $414M (-6% exc. forex).
- Symantec's FQ3 results, earnings release
- Update (4:39PM ET): After coming off a halt, Symantec is up 8.7% after hours.
Thu, Feb. 4, 4:17 PM
- Symantec (NASDAQ:SYMC): FQ3 EPS of $0.26 beats by $0.02.
- Revenue of $909M (-6.3% Y/Y) beats by $3.19M.
Wed, Jan. 20, 8:07 AM
- Citing "uncertainties developed regarding the transaction," Symantec (NASDAQ:SYMC) and Carlyle (NASDAQ:CG) have amended the terms of Carlyle's purchase of Symantec's Veritas storage software unit to cut the purchase price from $8B to $7.4B, and double Veritas' offshore cash balance to $400M.
- Symantec will now be paid $6.6B in cash and left with a $400M equity interest in Veritas. After-tax cash proceeds are expected to total $5.3B, down from an original $6.3B.
- The deal is still expected to close on Jan. 29. The sale price cut follows a Nasdaq selloff, as well as November reports indicating banks had postponed marketing the debt Carlyle planned to use to finance the Veritas deal.
- Separately, Symantec now expects FQ3 revenue, op. margin, and EPS to be above the midpoints of the guidance ranges provided in its Nov. 5 FQ2 report. FQ3 results are due on Feb. 4.
- Symantec has dropped to $18.05 premarket, making new 52-week lows in the process.
Nov. 5, 2015, 2:58 PM
- While many security tech peers sell off in response to FireEye's soft top-line results/guidance, Symantec (SYMC - unchanged) is nearly flat after beating FQ2 EPS estimates and posting in-line revenue.
- A $500M accelerated buyback has been authorized. It follows a $1.5B August increase to Symantec's buyback authorization to $2.6B. $250M was spent on buybacks over the first 6 months of FY16.
- Guidance has been provided for what will be left of Symantec (i.e. its security software ops) once the $8B sale of the company's Veritas storage software unit closes (expected by Jan. 1). The security ops are expected to have FQ3 revenue of $890M-$920M (-2% to -5% Y/Y exc. forex) and EPS of $0.22-$0.25, and FQ4 revenue of $885M-$915M Y/Y (-1% to -4% Y/Y exc. forex) and EPS of $0.24-$0.27.
- With share losses and forex continuing to weigh, consumer security revenue fell 13% Y/Y in FQ2 to $420M, and enterprise security revenue 5% to $485M. On a forex-adjusted basis, consumer revenue is expected to drop 6%-8% Y/Y in FQ3 and 5%-8% in FQ4. Enterprise revenue is expected to be down 2% to up 2% forex-adjusted in FQ3, and down 1% to up 3% in FQ4.
- FQ2 results, PR
Nov. 5, 2015, 7:39 AM
- Symantec (NASDAQ:SYMC): FQ2 EPS of $0.44 beats by $0.02.
- Revenue of $1.5B (-7.4% Y/Y) in-line.
Nov. 4, 2015, 5:30 PM
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Aug. 11, 2015, 11:10 AM
- In addition to missing FQ1 estimates, Symantec (NASDAQ:SYMC) is guiding for FQ2 revenue of $1.485B-$1.525B and EPS of $0.40-$0.43, below a consensus of $1.54B and $0.45. FY16 (ends March '16) guidance is revenue of $6.21B-$6.35B and EPS of $1.80-$1.90, in-line with a consensus of $6.27B and $1.86.
- Segment/regional performance: Consumer security revenue (hurt by both rival paid products/services and Microsoft's free offerings) fell 19% Y/Y in FQ1 to $430M, and enterprise security revenue fell 13% to $482M (share loss). Ahead of its sale to Carlyle, the Information Management (Veritas, storage software) unit saw revenue drop 10% to $587M. U.S. revenue was down 8%, and international 19%. Forex had a 7% impact on total revenue growth.
- Financials: With the help of job cuts, GAAP operating expenses fell 5% Y/Y to $1.04B. The deferred revenue balance fell 8% to $3.42B. $90M was spent on buybacks. Symantec ended FQ1 with $3.7B in cash, and $2.1B in debt.
- FQ1 results, PR, Veritas sale
- Update: Credit Suisse's Phillip Winslow has downgraded Symantec to Neutral. He argues the $1.5B tax liability produced by the Vertias sale - it wouldn't exist if a spinoff occurred - represents a destruction of shareholder value, and is also concerned about how Symantec might spend some of the proceeds.
Aug. 11, 2015, 7:04 AM
- Symantec (NASDAQ:SYMC): FQ1 EPS of $0.40 misses by $0.03.
- Revenue of $1.5B (-13.8% Y/Y) misses by $30M.
Aug. 10, 2015, 5:35 PM
May 15, 2015, 2:07 PM
- Symantec (NASDAQ:SYMC) has fallen below $25 after missing FQ4 estimates and offering light FQ1/FY16 guidance. No downgrades have arrived in response.
- On the CC (transcript), the company blamed its FQ4 miss on an $8M increase in forex pressures relative to guidance - revenue fell 6% Y/Y in dollars, but was up 1% in constant currency - and an $11M true-up for employee defined benefit plans. It added FQ1 guidance would be higher if the quarter didn't have one less week than the year-ago period.
- Segment performance: Consumer security sales (hurt by competition and Microsoft's free offerings) remained under pressure in FQ4, falling 13% Y/Y to $438M (worse than FQ3's -11%). Enterprise security sales fell 6% to $491M, worse than FQ3's -4% and underperforming peers seeing strong growth amid rising corporate cybersecurity spend. The Veritas Information Management unit (set to be spun off) saw revenue fall 1% to $619M, after rising 1% in FQ3.
- Total license revenue rose 2% to $200M, while content, subscription, and maintenance revenue fell 7% to $1.35B. The deferred revenue balance fell 6% to $3.66B.
- Forex contributed to an 11% drop in international revenue to $758M; U.S. revenue fell 2% to $790M. In spite of lower sales, operating expenses fell to 56.2% of revenue from 56.5% a year ago thanks to cost cuts. $500M was spent on buybacks.
- FQ4 results, PR
May 14, 2015, 4:07 PM
- Symantec (NASDAQ:SYMC): FQ4 EPS of $0.43 misses by $0.01.
- Revenue of $1.55B (-6.1% Y/Y) misses by $10M.
- Expects FQ1 revenue of $1.5B-$1.54B and EPS of $0.41-$0.44, below a consensus of $1.62B and $0.45.
- Expects FY16 (ends March '16) revenue of $6.21B-$6.35B and EPS of $1.80-$1.90, almost entirely below a consensus of $6.38B and $1.90.
- Shares -3.4% AH
May 13, 2015, 5:35 PM
Feb. 5, 2015, 4:05 PM
- Symantec (NASDAQ:SYMC): FQ3 EPS of $0.53 beats by $0.04.
- Revenue of $1.63B (-4.1% Y/Y) misses by $40M.
Symantec Corp. engages in the provision of security, storage, and systems management solutions. It operates through the following segments: Consumer Security, Enterprise Security, and Information Management. The Consumer Security segment offers multi-layer security and identity protection on... More
Industry: Security Software & Services
Country: United States
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