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Symantec Reports Fourth Quarter Fiscal 2011 Results
- GAAP Revenue of $1.67 billion
- Non-GAAP Operating Margin of 24.1 percent
- Non-GAAP Earnings Per Share of $0.38
- GAAP Deferred Revenue of $3.82 billion
- Cash Flow from Operations of $689 million
Fiscal Year 2011
- GAAP Revenue of $6.19 billion
- Non-GAAP Operating Margin of 24.8 percent
- Non-GAAP Earnings Per Share of $1.42
- Cash Flow from Operations of $1.79 billion
Symantec Corp. (Nasdaq:SYMC) today reported the results of its fourth quarter and the fiscal year 2011, ended April 1, 2011. GAAP revenue for the fiscal fourth quarter was $1.67 billion, up 9 percent year-over-year and up 8 percent after adjusting for currency. For the fiscal year, GAAP revenue was $6.19 billion, up 3 percent year-over-year and up 4 percent after adjusting for currency.
"We closed our fiscal year surpassing expectations across each of our key financial metrics, driven by market share gains and growth in backup, software-as-a-service, data loss prevention and consumer. In addition, our recent acquisitions performed above expectations for the third consecutive quarter," said Enrique Salem, president and chief executive officer, Symantec. "Our rigorous approach to running the business positions us well for fiscal year 2012, during which we will execute on our vision by energizing our core businesses and capitalizing on opportunities in mobile, cloud and virtualization."
"We achieved record quarterly revenue and deferred revenue, as a result of strong bookings performance across all three regions," said James Beer, executive vice president and chief financial officer, Symantec. "We continued to generate substantial cash flow from operations driven by the success of our sales efforts and our continuing focus on cost control."
GAAP Results: GAAP operating margin for the fourth quarter of fiscal year 2011 was 14.3 percent compared with 16.1 percent for the same quarter last year. GAAP net income for the fiscal fourth quarter was $168 million compared with $184 million for the year-ago period. GAAP diluted earnings per share were $0.22 compared with $0.23 for the year-ago quarter.
For the fiscal year 2011, GAAP operating margin was 14.2 percent. GAAP net income for the fiscal year 2011 was $597 million. GAAP diluted earnings per share for the year were $0.76.
GAAP deferred revenue as of April 1, 2011, was $3.82 billion compared with $3.21 billion as of April 2, 2010, up 19 percent year-over-year and up 16 percent after adjusting for currency.
Cash flow from operating activities for the fourth quarter of fiscal year 2011 was $689 million compared with $703 million for the same quarter last year. Symantec ended the quarter and fiscal year with cash, cash equivalents and short-term investments of $2.958 billion. Cash flow from operating activities for fiscal year 2011 was $1.79 billion compared with $1.69 billion for fiscal year 2010, an increase of 6 percent.
Non-GAAP Results: Non-GAAP operating margin for the fourth quarter of fiscal year 2011 was 24.1 percent compared with 28.1 percent for the year-ago period. Non-GAAP net income for the fourth quarter was $297 million compared with $323 million for the year-ago quarter. Non-GAAP diluted earnings per share were $0.38 compared with earnings per share of $0.40 for the year ago quarter.
For the fiscal year 2011, Non-GAAP operating margin was 24.8 percent. Non-GAAP net income for the year was $1.12 billion. Non-GAAP diluted earnings per share were $1.42.
During the fourth quarter of fiscal year 2011, Symantec repurchased approximately 11 million shares for $180 million at an average price of $17.86. During the fiscal year 2011, the company repurchased 57 million shares at an average price of $15.39, equivalent to $870 million. Symantec has $877 million remaining in the current board authorized stock repurchase program.
Business Segment and Geographic Highlights
For the quarter, Symantec's Consumer segment represented 31 percent of total revenue and increased 6 percent year-over-year (5 percent after adjusting for currency). The Security and Compliance segment represented 27 percent of total revenue and increased 24 percent year-over-year (21 percent after adjusting for currency). The Storage and Server Management segment represented 37 percent of total revenue and increased 8 percent year-over-year (7 percent after adjusting for currency). Services represented 5 percent of total revenue and declined 21 percent year-over-year (22 percent after adjusting for currency) as expected due to the company's move to a partner-led consulting model.
International revenue represented 51 percent of total revenue in the fourth quarter of fiscal year 2011 and increased 10 percent year-over-year (8 percent after adjusting for currency). The Europe, Middle East and Africa region represented 29 percent of total revenue for the quarter and increased 4 percent year-over-year on an actual and currency-adjusted basis. The Asia Pacific/Japan revenue for the quarter represented 16 percent of total revenue and increased 22 percent year-over-year (12 percent after adjusting for currency). The Americas, including the United States, Latin America and Canada, represented 55 percent of total revenue and increased 9 percent year-over-year on an actual and currency-adjusted basis.
Recent acquisitions continue to perform better than expected. For the quarter, the VeriSign security business generated revenue of $61 million and the PGP and GuardianEdge acquisitions generated revenue of $20 million. The combined earnings per share dilution of these acquisitions was a penny and a half, which was half a penny better than expected.
For the fiscal year 2011, revenue from acquisitions was $186 million, exceeding expectations. The combined earnings per share dilution of these acquisitions was 8.5 cents, which was 2.5 cents better than expected.
First Quarter Fiscal Year 2012 Guidance
Guidance assumes an exchange rate of $1.42 per Euro for the June 2011 quarter versus the actual weighted average and end of period rate of $1.26 per Euro for the June 2010 quarter.
For the first quarter of fiscal year 2012, ending July 1, 2011, revenue is estimated between $1.570 billion and $1.590 billion, up 10 to 11 percent year-over-year as reported.
GAAP diluted earnings per share are estimated between $0.19 and $0.20. Non-GAAP diluted earnings per share are estimated between $0.36 and $0.37.
Deferred revenue is expected to be in the range of $3.60 billion and $3.63 billion, up 20 to 21 percent year-over-year as reported.
Symantec has scheduled a conference call for 5 p.m. ET/2 p.m. PT today to discuss the results from the fiscal fourth quarter and fiscal year 2011, ended April 1, 2011, and to review guidance. Interested parties may access the conference call on the Internet at http://www.symantec.com/.... To listen to the live call, please go to the Web site 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.
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 2, 2010.
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.
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