SYMANTEC CORP. $18.94 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (1-408-517-8000; www.symantec.com; Shares outstanding: 701.9 million; Market cap: $13.3 billion; No dividends paid) sells computer-security technology, including anti-virus and email-filtering software, to businesses and consumers. It also offers data-archiving software that helps its clients meet increasingly strict regulatory and compliance standards.
In the three months ended June 29, 2012, Symantec’s earnings per share excluding one-time items rose 7.5%, to $0.43 from $0.40. That beat the consensus estimate of $0.33.
Revenue rose just 0.9%, to $1.67 billion from $1.65 billion. Stronger sales of security software to businesses offset lower sales to consumers, who account for about 30% of Symantec’s overall revenue. As well, higher sales in the Americas and Asia helped overcome declines in Europe.
Symantec’s long-term debt of $2.1 billion is a moderate 16% of its market cap. It also holds cash of $4.1 billion, or $5.70 a share. That should let it maintain its high research spending (14.9% of revenue in the latest quarter), which will help it keep up with fast-changing online security threats.
However, the weak U.S. and European economies will continue to weigh on Symantec’s short-term sales growth.
Symantec is a hold.
