Symantec Reports Record Revenue and Earnings, Raises Fiscal Year Guidance; Consumer Performance Exceeds Expectations Following Numerous Threat Outbreaks During the Quarter

Business Wire, Oct 22, 2003

Business Editors/High-Tech Writers

CUPERTINO, Calif.--(BUSINESS WIRE)--Oct. 22, 2003

Symantec Corp. (Nasdaq:SYMC), the world leader in Internet security, today reported results for the fiscal second quarter 2004 ended Oct. 3, 2003. Symantec posted revenue for the quarter of $429 million, a 32 percent increase compared to $325 million for the same quarter last year, driven by strong enterprise security growth and higher than expected results in the consumer segment.

GAAP Results: Net income for the fiscal second quarter was $83 million, compared to $52 million for the same quarter last year. Earnings per share was $0.49, compared to earnings per share of $0.33 for the year-ago quarter.

Non-GAAP Results: Non-GAAP net income for the fiscal second quarter was $91 million, compared to $60 million for the same quarter last year. Non-GAAP earnings per share was $0.53, compared to earnings per share of $0.38 for the year-ago quarter. Non-GAAP results and related reconciliation, as outlined in the attached consolidated statements, exclude expenses from the amortization of other intangibles from acquisitions and acquired in-process research and development as well as related income tax benefits. See "Use of Non-GAAP Financial Information" below.

"It was a stellar quarter across the board with strong performances in all regions," said John W. Thompson, Symantec chairman and CEO. "Our integrated approach for enterprises and consumers continues to gain momentum and set the bar for the rest of the industry."

Revenue Components

For the quarter, Symantec's worldwide enterprise business, including enterprise security, enterprise administration, and services, represented 55 percent of total revenue. Symantec's enterprise security business represented 41 percent of total revenue and grew 25 percent year-over-year; the enterprise administration business represented 12 percent of revenues and declined 8 percent in line with expectations; and the services business grew 53 percent and represented 2 percent of total revenue. Symantec's consumer business grew 56 percent and represented 45 percent of total revenue.

International revenues represented 50 percent of total revenue in the second quarter and grew 39 percent over the same quarter last year. Canada led the increase for the quarter with 49 percent growth, followed by the Europe, Middle East and Africa region with 46 percent growth. Japan recorded 27 percent year-over-year growth, Asia Pacific recorded 24 percent growth and Latin America had 9 percent growth. The United States grew at 26 percent.

Business Outlook

Forward-looking guidance for the fiscal third quarter ending Jan. 2, 2004, is as follows:

-- Revenue is expected to be in the range of $440 to $460

million.

-- GAAP earnings per share is expected to be $0.52 at the

midpoint of the revenue guidance.

-- Non-GAAP earnings per share is expected to be $0.56 at the

midpoint of the revenue guidance.

Forward-looking guidance for the fiscal year, ending April 2, 2004, updated to reflect the fiscal year-to-date actual performance and estimated results for the fiscal third and fourth quarters is as follows:

-- Revenue is expected to be approximately $1.73 billion.

-- GAAP earnings per share is expected to be $1.90 at the stated

revenue forecast, up 15 cents from previous guidance.

-- Non-GAAP earnings per share is expected to be $2.10 at the

stated revenue forecast, up 14 cents from previous guidance.

Non-GAAP earnings per share excludes the pre-tax amortization of other intangibles from acquisitions, acquired in-process research and development, and other items such as patent settlement and restructuring charges of approximately $11 million and $58 million for the quarter ending Jan. 2, 2004, and the fiscal year ending April 2, 2004, respectively.

Quarterly Highlights

-- Symantec signed 129 contracts worldwide worth more than

$100,000 each, including 36 worth more than $300,000 each and

6 worth more than $1 million each, during the quarter.

-- Symantec signed new or extended agreements with customers

including Nextel; Cinergy, one of the nation's largest utility

companies; Digex, Incorporated, a leading provider of

enterprise hosting services; Rinker Materials, one of the

nation's leaders in building and construction materials;

Qualex, Inc., the largest wholesale and on-site photofinishing

company in the world; Storage Technologies Corp., a worldwide

data storage company; Sykes Enterprises, a global leader in

providing outsourced customer management solutions and

services; and CenturyTel, Inc., the nation's eighth largest

local telephone exchange company.

-- Symantec also signed new or extended agreements with public

sector and education customers including Temple University;

the State of Tennessee; the U.S. Department of the Interior;

the U.S. Environmental Protection Agency; the U.S. Department

of State; the U.S. Army; and the Internal Revenue Service.

-- Around the world, Symantec signed contracts with customers

including South Korea-based Samsung Electronics; Jainam