With global revenue dropping, Symantec posts big loss
- 29 January, 2009 06:55
Symantec posted a big loss Wednesday, citing the tough economic climate, but the company's quarterly earnings still were better than analysts had expected.
Citing the tough economy and the beating that Symantec's stock has taken over the past year, the security and storage software vendor took a non-cash write-down for its third quarter, ended Jan. 2, leaving it with a loss of US$6.81 billion for the quarter. "Given that the markets were off as much as they were, we went in mid-November and did a goodwill impairment analysis," said Enrique Salem, the company's chief operating officer, who is set to replace current CEO John Thompson in April.
Excluding charges such as the goodwill write-down, the company blew past expectations, posting earnings of $350 million, or $0.42 per share. Analysts had been expecting earnings of $0.32 per share, according to a survey by Thomson Financial.
Revenue was down compared to last year's third quarter in most segments of the world, except the U.S., Latin America and Canada. There, sales were spurred by deals with Continental Airlines, Yamaha Corporation of America and Canadian Tire, and revenue rose 7 percent. Worldwide, the company's storage and server management group saw revenue rise just 1 percent, and the consumer group's revenue rose just 2 percent. The company's security and compliance products saw revenue drop 5 percent.
Symantec cut costs in November by laying off staff throughout the company. It hasn't said how many positions it terminated, but the cuts amounted to 4.5 percent of salary costs. On Wednesday, Salem didn't rule out the possibility of future cuts. "We're going to work hard to continue to manage our expenses, and at this point I'm pleased with the performance of the company," he said, adding, "I can't forecast what's going to happen in the economy."
Salem also declined to forecast who might be Barack Obama's next pick for U.S. Secretary of Commerce, a job that is reportedly going to Salem's boss, John Thompson. News reports this week have said Thompson is currently being vetted for the post and is considered the new administration's top pick.
Thompson, a contributor to Obama's campaign, told the IDG News Service last November that he would consider such a position. "Clearly if I were to get a call from the president-elect, it would be not only stupid, but unpatriotic to not take the call and consider anything that he might want to chat with me about," he said at the time.
Salem said Thompson would make a great choice. "I think John is a terrific leader and if he could be a part of helping our country do well, I think he would serve well and would do a good job."