“Symantec Corp. (SYMC) sells Internet security technology, including anti-virus and Internet content and email filtering software, to businesses and consumers. In its 2011 third quarter, which ended December 31, 2010, Symantec’s revenue rose 3.6%, to $1.6 billion from $1.5 billion a year earlier. The company gets 52% of its revenue from overseas sales. If you disregard the negative impact of exchange rates, sales rose 5% during the quarter. The company earned $272 million, down 16.3% from $325 million a year earlier.
“Symantec spent $265 million on share buybacks in the latest quarter. Due to fewer shares outstanding, earnings per share fell 12.5%, to $0.35 from $0.40 a year earlier. These figures exclude unusual items, such as costs to absorb recent acquisitions. On this basis, the latest earnings beat the consensus estimate of $0.33. Publicity around the WikiLeaks affair, involving the public release of often-embarrassing diplomatic cables, has made the company’s customers more security conscious. This should help Symantec sell more anti- virus and other software, despite the sluggishness of the U.S. economic recovery. Symantec devotes around 15% of its revenue to research, so it’s more profitable than it appears. This spending will also help it keep its lead in the competitive and fast-changing computer-security industry. The company’s long-term debt of $2.0 billion is 14.5% of its $13.8-billion market cap. ... The stock trades at 12.5 times the $1.40 a share, excluding one- time items, that Symantec should earn in fiscal 2011. Symantec is now a buy.”
Patrick McKeough, Wall Street Stock Forecaster, 1/28/11