Symantec blames enterprise sales for earnings drop

Earnings and revenue were down for the security vendor's first quarter

Symantec blamed slowing enterprise sales for a sharp drop in earnings for its quarter ended July 3.

The security software vendor reported earnings of US$73 million, or $0.34 per share, for its first quarter of fiscal 2010, compared to $172 million and $0.40 per share in the same period last year.

Analysts polled by Thompson Reuters were only expecting slightly better. They predicted $0.35 per share.

Net revenue for the quarter was $1.43 billion, down from $1.65 billion in the corresponding quarter last year.

The drop in revenue came as enterprises focused their spending on shorter-term contracts or maintenance renewals, leading to fewer new licensing deals, Symantec CEO Enrique Salem said in a statement.

On the positive side, he said the company is pleased with the results from its consumer business and from its Norton 2009 products.

Symantec's Services business performed the worst, with revenues declining by 20 percent over last year, followed by its Storage and Server Management segment, which declined 17 percent. The consumer business, which makes up almost a third of revenue, dropped 4 percent, and the Security and Compliance segment dropped 14 percent compared to the previous year.

The company credited its focus on expense management for reaching earnings per share within its guided range. Late last year Symantec laid off staff throughout the company. It hasn't said how many positions it terminated, but the cuts amounted to 4.5 percent of total salary costs.

For its next quarter, ending Oct. 2, Symantec expects revenue based on generally accepted accounting practices to reach between $1.39 billion and $1.44 billion.

Symantec competitor McAfee reports its earnings on Thursday.

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