Symantec stock falls on weak guidance after in line Q4 earnings

Security software maker Symantec Corp. (SYMC) swung to a profit in the fourth quarter of 2019 from a loss last year, helped by lower costs and expenses. The bottom line came in line with the analysts’ expectations while the top line missed consensus estimates. However, the company guided earnings and revenue for the first quarter and fiscal 2019 below the Street’s view.

In a separate press release, Symantec announced the appointment of Richard Hill as Interim President and CEO, effective immediately. Hill succeeds Greg Clark, who has stepped down as President and CEO and as a member of the Symantec Board, also effective immediately. The company will commence a search process to find a permanent CEO.

Vincent Pilette, CFO of Logitech and former VP of Finance for Hewlett Packard Enterprise’s server, storage and networking business, has been appointed Executive Vice President and Chief Financial Officer of Symantec, effective May 21, 2019. Pilette’s appointment follows a comprehensive search process initiated in connection with Nicholas Noviello’s departure as EVP and CFO to pursue other opportunities.

Net income was $34 million or $0.05 per share compared to a loss of $59 million or $0.10 per share in the previous year quarter. Adjusted earnings decreased by 11.4% to $0.39 per share.

Net revenues declined by 1.7% to $1.19 billion. The Consumer Cyber Safety segment continued to deliver solid results, while Enterprise Security revenue was below its guidance range due to lower than expected bookings, which led to year-over-year reported billings declining greater than anticipated.

Looking ahead into the first quarter of 2020, the company expects revenue in the range of $1.171 billion to $1.201 billion, earnings in the range of $0.01 to $0.05 per share and adjusted earnings in the range of $0.30 to $0.34 per share. Adjusted revenue is predicted to be in the range of $1.175 billion to $1.205 billion.

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For fiscal 2020, the company predicts revenue in the range of $4.75 billion to $4.89 billion and adjusted revenue in the range of $4.76 billion to $4.90 billion. Earnings are anticipated to be in the range of $0.57 to $0.73 per share and adjusted earnings are projected to be in the range of $1.65 to $1.80 per share.

Symantec’s board of directors has declared a quarterly cash dividend of $0.075 per common share. The dividend will be payable on June 26, 2019, to all shareholders of record as of the close of business on June 10, 2019.

The company repurchased 11 million shares and retired $600 million in debt during the fourth quarter of 2019. Cash flow from operating activities for fiscal 2019 was $1.495 billion, up 57% year-over-year.

Shares of Symantec ended Thursday’s regular session down 0.40% at $22.17 on the Nasdaq. Following the earnings release, the stock inched down over 10% in the after-market session.

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