- GAAP Revenue of $1.715 billion, up 7%
- Non-GAAP Operating Margin of 26.2%, up 2.6 percentage points
- Non-GAAP Earnings Per Share of $0.42, up 20%
- GAAP Deferred Revenue of $3.665 billion, up 8%
- Cash Flow from Operations of $403 million
MOUNTAIN VIEW, Calif. – Jan. 25, 2012 – Symantec Corp. (Nasdaq:SYMC) today reported the results of its third quarter of fiscal year 2012, ended Dec. 30, 2011. GAAP revenue for the fiscal third quarter was $1.715 billion, up 7 percent year-over-year and up 6 percent after adjusting for currency.
“Through consistent execution of our strategy, we met or exceeded revenue and earnings for the sixth consecutive quarter,” said Enrique Salem, president and chief executive officer, Symantec. “With unprecedented information growth and the increasingly toxic threat landscape, customers understand the value of our portfolio and we continue to see good demand for our products and services across all geographies.”
“We delivered record December quarter revenue and deferred revenue, as well as double digit earnings per share growth,” said James Beer, executive vice president and chief financial officer, Symantec. “Our results were driven by strength in Data Loss Prevention, Authentication, Managed Security Services and Backup. Due to effective cross-selling of our industry leading portfolio, large deals hit an all time high.”
GAAP Results: GAAP operating margin for the third quarter of fiscal year 2012 was 17.5 percent compared with 14.3 percent for the same quarter last year. GAAP net income for the fiscal third quarter was $240 million compared with net income of $132 million for the year-ago period, an increase of 82 percent year-over-year. GAAP diluted earnings per share were $0.32 compared with $0.17 for the year-ago quarter, an increase of 88 percent year-over-year.
GAAP deferred revenue as of Dec. 30, 2011, was $3.665 billion compared with $3.408 billion as of Dec. 31, 2010, up 8 percent on an actual and currency adjusted basis. Cash flow from operating activities for the third quarter of fiscal year 2012 was $403 million compared with $460 million for the year ago period. Symantec ended the quarter with cash, cash equivalents and short-term investments of $2.380 billion.
Non-GAAP Results: Non-GAAP operating margin for the third quarter of fiscal year 2012 was 26.2 percent compared with 23.6 percent for the same quarter last year. Non-GAAP net income for the fiscal third quarter was $314 million compared with $272 million for the year-ago period, an increase of 15 percent year-over-year. Non-GAAP diluted earnings per share were $0.42 compared with earnings per share of $0.35 for the year-ago quarter, an increase of 20 percent year-over-year.
During the third quarter of fiscal year 2012, Symantec repurchased approximately 13 million shares for $220 million at an average price of $16.69. Symantec had $184 million remaining in the current board authorized stock repurchase plan at the end of the December quarter.
Business Segment and Geographic Highlights
For the December quarter, Symantec’s Consumer segment revenue represented 31 percent of total revenue and increased 5 percent year-over-year on an actual and currency-adjusted basis. The Security and Compliance segment revenue represented 30 percent of total revenue and increased 17 percent year-over-year on an actual and currency-adjusted basis. The Storage and Server Management segment revenue represented 36 percent of total revenue and increased 3 percent year-over-year on an actual and currency-adjusted basis. Services segment revenue represented 3 percent of total revenue and decreased 13 percent year-over-year (12 percent after adjusting for currency), as expected due to the company’s move to a partner-led consulting model.
International revenue represented 52 percent of total revenue in the third quarter of fiscal year 2012 and increased 6 percent year-over-year (5 percent after adjusting for currency). The Europe, Middle East and Africa region revenue represented 27 percent of total revenue for the quarter and decreased 1 percent year-over-year (flat after adjusting for currency). The Asia Pacific/Japan revenue for the quarter represented 18 percent of total revenue and increased 16 percent year-over-year (12 percent after adjusting for currency). The Americas, including the United States, Latin America and Canada, revenue represented 55 percent of total revenue and increased 8 percent year-over-year on an actual and currency-adjusted basis.
For the quarter, the Clearwell acquisition performed in line with expectations. Tighter technical integration between Symantec Enterprise Vault and the Clearwell eDiscovery Platform is on schedule and will help customers better protect information, establish retention policies and streamline the eDiscovery process.
Fourth Quarter Fiscal Year 2012 Guidance
Guidance assumes an exchange rate of $1.30 per Euro for the March 2012 quarter versus the actual weighted average rate of $1.37 and actual end of period rate of $1.41 per Euro for the March 2011 quarter.
For the fourth quarter of fiscal year 2012, ending March 30, 2012, revenue is estimated between $1.72 billion and $1.73 billion, up 2.8 to 3.4 percent year-over-year as reported and 4.9 to 5.5 percent on a currency adjusted basis.
GAAP diluted earnings per share are estimated between $0.23 and $0.24 up 5 to 9 percent year-over-year as reported. Non-GAAP diluted earnings per share are estimated between $0.41 and $0.42, up 8 to 10 percent year-over-year as reported.
Deferred revenue is expected to be in the range of $3.915 billion and $3.935 billion, up 2.5 to 3.0 percent year-over-year as reported and 4.8 to 5.3 percent on a currency adjusted basis.
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss the results from the fiscal third quarter 2012, ended Dec. 30, 2011, and to review guidance. Interested parties may access the conference call on the Internet at http://www.symantec.com/invest. To listen to the live call, please go to the website at least 15 minutes early to register, download and install any necessary audio software. A replay and script of our officers’ remarks will be available on the investor relations’ home page shortly after the call is completed.
Symantec is a global leader in providing security, storage and systems management solutions to help consumers and organizations secure and manage their information-driven world. Our software and services protect against more risks at more points, more completely and efficiently, enabling confidence wherever information is used or stored. More information is available at www.symantec.com.
NOTE TO EDITORS: If you would like additional information on Symantec Corporation and its products, please visit the Symantec News Room at http://www.symantec.com/news. All prices noted are in U.S. dollars and are valid only in the United States.
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FORWARD-LOOKING STATEMENTS: This press release contains statements regarding our financial and business results, which may be considered forward-looking within the meaning of the U.S. federal securities laws, including projections of future revenue, earnings per share and deferred revenue, as well as projections of amortization of acquisition-related intangibles and stock-based compensation and restructuring charges. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied in this press release. Such risk factors include those related to: general economic conditions; maintaining customer and partner relationships; the anticipated growth of certain market segments, particularly with regard to security and storage; the competitive environment in the software industry; changes to operating systems and product strategy by vendors of operating systems; fluctuations in currency exchange rates; the timing and market acceptance of new product releases and upgrades; the successful development of new products and integration of acquired businesses, and the degree to which these products and businesses gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. We assume no obligation, and do not intend, to update these forward-looking statements as a result of future events or developments. Additional information concerning these and other risks factors is contained in the Risk Factors sections of our Form 10-K for the year ended April 1, 2011.
USE OF NON-GAAP FINANCIAL INFORMATION: Our results of operations have undergone significant change due to a series of acquisitions, the impact of SFAS 123(R), impairment charges and other corporate events. To help our readers understand our past financial performance and our future results, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. The method we use to produce non-GAAP results is not computed according to GAAP and may differ from the methods used by other companies. Our non-GAAP results are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Investors are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which is attached to our quarterly earnings release and which can be found, along with other financial information, on the investor relations’ page of our Web site at www.symantec.com/invest.