SYMANTEC CORP. $24.54 - Nasdaq symbol SYMC

SYMANTEC CORP. $24.54 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (1-408-517-8000; www.symantec.com; Shares outstanding: 689.2 million; Market cap: $16.9 billion; No dividends paid) sells computersecurity technology, including anti-virus and email-filtering software, to businesses and consumers. It also offers data-archiving software.

Symantec’s shares continue to rise on better-than-expected earnings and a new restructuring plan that should improve the company’s longterm profitability.

In its fiscal 2013 third quarter, which ended December 28, 2012, Symantec’s revenue rose 4.4%, to a record $1.8 billion from $1.7 billion a year earlier. That’s mainly because its business clients are buying more of its data-security and storage services.

However, rising costs, including for labour, caused the company’s earnings to fall 0.3%, to $313 million from $314 million. Symantec spent $200 million on share repurchases in the latest quarter. Due to fewer shares outstanding, earnings per share rose 7.1%, to $0.45 from $0.42. That easily beat the consensus estimate of $0.38. The company continues to spend around 14% of its revenue on research and development.

Symantec’s restructuring plan mainly involves streamlining its product lines and marketing operations. As a result, it will cut 5% of its 20,500 employees. This should help it reach its profit margin (operating income divided by revenue) target of at least 30.0%; in the latest quarter, its profit margin was 25.6%.

The company will also pay a quarterly dividend starting in the three months ending June 30, 2013. The annual rate, probably $0.52 a share, would yield 2.1% based on today’s price.

Symantec is a buy.

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