Thu, Jul. 23, 11:27 AM
- As was the case 3 months ago, security tech plays are up strongly (HACK +3.6%) after Fortinet (FTNT +12%) beat estimates, reported strong billings, and delivered above-consensus top-line guidance. The Nasdaq is up 0.3%.
- In addition to FireEye, Palo Alto Networks, and CyberArk (previously covered), gainers include Barracuda Networks (CUDA +6.4%), KEYW Holding (KEYW +4.5%), Symantec (SYMC +1.9%), Imperva (IMPV +7.6%), Proofpoint (PFPT +3.6%), Vasco (VDSI +4.5%), AVG (AVG +3.1%), and Qualys (QLYS +5.7%). AVG is benefiting a bullish JPMorgan coverage launch; Proofpoint reports after the close.
- JPMorgan's Sterling Auty has upgraded Fortinet to Overweight, and a slew of firms have hiked their targets. Auty argues Fortinet's numbers suggest its efforts to grow its high-end presence (aided by major sales investments in recent years), and forecasts free cash flow will rise 43% this year.
- On Fortinet's earnings call (transcript), CFO Drew Del Matto mentioned $100K+ deals rose 53% Y/Y and $1M+ deal 133% (compares with 40% total billings growth). He also mentioned the company's high-end FortiGate UTM/next-gen firewall appliances made up 45% of billings (a new high), and that U.S. enterprise sales (benefiting from strong cybersecurity spend) rose 90%. Major deals were struck with "two of the most recognizable technology brands in the world," as well as two large i-banks.
Tue, Jul. 7, 6:41 PM
- Bloomberg reports Symantec (NASDAQ:SYMC) is "nearing a deal" to sell its Veritas storage software unit (currently set to be spun off) to P-E firm Carlyle (NASDAQ:CG) for $7B-$8B. For reference, Symantec closed today with a $15.4B market cap.
- Deal terms are still being negotiated. Symantec hasn't been shy about its willingness to field offers for Veritas, which was acquired for $13B+ in 2005. Reuters reported in April tax concerns had hurt buyout interest.
- Symantec has risen to $23.40 AH. The company's Information Management ops had FY15 (ended in March) revenue of $2.56B (+1% Y/Y).
Mon, Jun. 22, 1:09 PM
- Citing a 70% YTD rally, UBS' Brent Thill has downgraded FireEye (FEYE -3%) to Neutral. Symantec (SYMC -1.5%), which is down 7% YTD, has been cut to Sell. Buy ratings have been reiterated (and targets hiked) for Palo Alto Networks and Fortinet, and a neutral rating reiterated for Check Point.
- Discussing cybersecurity stocks in general (HACK -0.1%), Thill (though still positive about end-market demand) argues the easy money has already been made following big 2015 gains fueled by well-publicized hacking incidents and rising corporate security IT spend. "All key players will lap a combination of tough comps and escalating execution expectations that will narrow the margin for error on the stocks."
- Separately, FireEye (hired to probe many a cyberattack) has identified a Chinese group it believes carried out a giant federal personnel records hack. FireEye: "Unlike other actors operating in China who conduct industrial espionage or steal defense technology, this group has primarily targeted [personally identifiable information]."
Mon, Jun. 1, 12:21 PM
- Believing Symantec (SYMC +1.2%) is a better enterprise software value play, Citi's Walter Pritchard has downgraded CA Technologies (CA -0.9%) to Sell, and cut his target to $28.
- Pritchard: "We see more room for upside to revenue at Symantec driven by execution improvements post business split while recent evidence points to further backlog deterioration at CA. On the profit front, CA has just committed to higher margins, & we see more room for unanticipated margin upside at SYMC."
- He admits CA's mainframe software business is more stable than Symantec's Norton security software/services business (has been struggling), but adds Symantec's growth businesses have more upside. Both companies could potentially return more capital, but Symantec is deemed "more likely" to do so.
- Separately, CA has hired Otto Berkes, until recently HBO's CTO and before than an 18-year Microsoft vet, to be its CTO. He'll report to CEO Mike Gregoire.
- Berkes oversaw the development of the HBO Go streaming service, among other things. He reportedly resigned last fall in response to HBO's decision to outsource video delivery for its HBO Now standalone streaming service to the MLB. At the time, Fortune reported HBO chose to outsource following internal dissatisfaction with Berkes and delayed product launches.
- Last week: CA buying Rally Software for $480M
Fri, May 15, 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
Thu, May 14, 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
- Press Release
Wed, May 13, 5:35 PM
Mon, Apr. 13, 2:44 PM
- After surging before the close on Friday thanks to a WSJ report stating the company is exploring a sale of its Veritas storage software unit that (in the opinion of a source) could fetch more than $8B, Symantec (NASDAQ:SYMC) is now barely above its Thursday close.
- Likely playing a role: Reuters has followed up by reporting Symantec has been seeking buyers for Veritas, if not for the entire company, for months, and that "interest from potential buyers has been limited because of a tax burden associated with splitting the company." Symantec is said to have reached out to EMC, NetApp, and P-E firms.
- Analysts like the idea of a Veritas sale. Cowen: "Timing aside, we do believe that suitable buyers exist, with Oracle, NetApp, and EMC, the most likely strategic bidders, but PE also very possible ... Given Veritas’ low growth profile and tough competition, we believe this would be a good exit for SYMC..."
- Sterne Agee: "Both EMC and and NetApp have likely been afforded the opportunity to consider this acquisition before – we would be surprised if either vendor were to actively pursue this M&A."
- Jefferies: "We very roughly assume a $3bn tax basis and 40% tax on any gain on the sale of Veritas, which translates to $2bn in tax leakage on an $8bn transaction." The firm only values Veritas at $5B, but admits "low interest rates and high degrees of financial leverage present upside risk to our valuation."
- Meanwhile, a Piper Q1 security reseller survey found 38% stating their Symantec sales are below plan vs. 13% above plan. Moreover, for Q2, Symantec is said to have "the weakest [sales] pipeline of all vendors, with 50 percent of resellers expecting below normal seasonality."
Fri, Apr. 10, 4:01 PM
- The WSJ reports Symantec (NASDAQ:SYMC) is exploring a sale of its storage software unit. The business, once more known as Veritas, is set to be spun off by year's end.
- P-E firms and "possible industry bidders" have reportedly been contacted. One source states "potential buyers approached Symantec about Veritas before it began contacting possible bidders" while adding the business could fetch more than $8B; Symantec currently sports a $17.2B market cap. Taxes related to a sale are seen as a potential roadblock.
- Symantec, whose storage software ops saw revenue rise only 1% Y/Y in FQ3 amid tough competition, has shot higher on the report. The company's analyst day arrives on April 17, and its FQ4 report on May 14.
Fri, Feb. 6, 8:39 PM
- A Delaware federal jury has ordered Symantec (NASDAQ:SYMC) to pay $17M in damages for infringing two patents held by infamous IP licensing firm Intellectual Ventures, while clearing it of infringing a third patent.
- The award is far less than the $298M IV was seeking. The firm had sued Symantec and three other companies over security software patents in 2010.
- Symantec says it's weighing its options to further reduce the damages. Its shares fell 4.6% in regular trading due to the soft FQ4 guidance provided with the company's mixed FQ3 results.
Thu, Feb. 5, 7:04 PM
- Symantec (NASDAQ:SYMC) expects FQ4 revenue of $1.525B-$1.585B and EPS of $0.42-$0.45, below a consensus of $1.63B and $0.49. Forex is expected to have a $95M impact on revenue, and a $0.06 impact on EPS.
- Along with its FQ3 numbers, Symantec has launched a new $1B buyback, good for repurchasing over 5% of shares at current levels. Symantec spent $375M on buybacks over the first 9 months of FY15 through its prior program, which had $283M remaining as of Jan. 2.
- License revenue rose 15% Y/Y in FQ3 to $226M, but content, maintenance, & subscription revenue fell 6% to $1.41B. Consumer security revenue was a weak point, falling 11% Y/Y to $461M amid tough competition from Intel (McAfee) and others. Enterprise security fell 4% to $509M (competition is also intense here), and information management (storage software, set to be spun off) rose 1% to $688M.
- Forex had a 4% impact on each segment's growth, and led total international revenue to fall 8%. U.S. revenue rose 1%.
- The deferred revenue balance fell by 4% Y/Y to $3.49B. Thanks to job cuts and forex, operating expenses only rose 1% to $1.03B.
- SYMC -1.8% AH. FQ3 results, PR.
Thu, Feb. 5, 4:52 PM
Thu, Feb. 5, 4:05 PM
Thu, Jan. 29, 1:21 PM
- What's old is new again: Ten years after merging with storage management software leader Veritas, Symantec (SYMC -0.8%) has decided its storage software ops will go under the Veritas name after being spun off from the company's security software/service ops.
- Symantec adds the businesses that will (again) be known as Veritas had FY14 (ended March. '14) revenue of $2.5B (37% of Symantec's total revenue). FY15's FQ4 results are due on Feb. 5.
Tue, Jan. 13, 12:38 AM
- Symantec (NASDAQ:SYMC) is hiring 65 engineers and data scientists, and is licensing IP, from Boeing's (NYSE:BA) Narus cybersecurity analytics software unit. Terms are undisclosed.
- Narus' technology relies on algorithms and data fusion techniques to analyze large volumes of Web traffic, and filter suspect material. The company was the subject of a 2006 class-action suit alleging AT&T used its products to support the NSA's warrantless wiretap program.
- The purchase comes as corporate interest in cybersecurity continues to surge in response to high-profile breaches - Pres. Obama will outline his cybersecurity proposals later this week - and as Symantec tries to better compete against a slew of smaller, faster-growing security tech firms offering some mixture of hardware, software, and services to protect against external threats.
Mon, Jan. 5, 1:37 PM
- Symantec's (SYMC -0.8%) FQ3 report will be posted after the close on Thursday, February 5. A CC will be held at 5PM ET (webcast on IR site).
- Consensus is for revenue of $1.67B (-1.8% Y/Y), and EPS of $0.49. Symantec, which remains set to split its security and storage software ops by year's end, provided below-consensus FQ3 and FY15 revenue guidance in November. EPS guidance was a little healthier.
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Symantec Corp provides security, backup and availability solutions. Its products and services protect people and information in any environment, from the smallest mobile device, to the enterprise data center, to cloud-based systems.
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