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Symantec Corporation (NASDAQ: SYMC) forecast sales and profit for their second quarter on Wednesday missed Wall Street expectations, causing their stock to drop.
Excluding some costs, Symantec’s profit forecast will be 32 cents to 34 cents a share in the fiscal second quarter, which ends in October, the world’s leader in security software said Wednesday in a statement. That compares with an average estimate of 36 cents in a Bloomberg survey of analysts.
Enrique Salem, Symantec’s new chief executive officer, faces a slump in technology spending and mounting competition from McAfee Inc. To cope with falling revenue, the company has frozen salaries and set sales quotas for more of its employees. Symantec has struggled to seal deals with customers, especially corporations, said Sarah Friar, an analyst with Goldman Sachs Group Inc. to Bloomberg.
The company forecast sales of $1.4 billion to $1.45 billion in the second quarter, compared with an analyst estimate of $1.5 billion.
First-quarter net income fell to $73 million, or 9 cents a share, from $172 million, or 20 cents, a year earlier. Excluding some costs, profit was 34 cents in the period, which ended July 3. That compared with the 35-cent average estimate.
The company reports sales that include revenue from acquired companies. On that basis, sales fell to $1.44 billion in the first quarter. Analysts estimated $1.48 billion.
Symantec fell $1.26 to $15.98 in late trading after the results were released. The shares, up 28 percent this year, closed at $17.24 on the Nasdaq Stock Market.
Spending on information technology may have hit bottom, Goldman Sachs said this month. The firm said it’s seeing “modest, early signs of recovery.”
Goldman Sachs estimates that global software spending will grow 6.3 percent in 2010, compared with a 5 percent decline this year.
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