Rochester,NY 7/31/2009 1:18:50 AM
Symantec Corporation, SYMC - Symantec's Upside Could be Less Secure
Symantec Corporation
SYMANTEC'S results and guidance expected as the company is seeing a further shift towards shorter duration transactions; end-demand also appears to have not stabilized. Our thesis – which is better than expected margin picture this year – is probably now off the table making it more difficult for us to recommend the stock. As such, we are downgrading shares of Symantec to a Neutral from a Buy.
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Fiscal-first-quarter results has brought up the Revenue of $1.44 billion (down 8% year-over-year on a constant-currency basis) because of the weekeness of the enterprise. It was at the low end of the range and below our $1.48 billion estimate. The company saw a drop-off in enterprise revenue due to shorter duration transactions which resulted in lower-than-expected license revenue. Operating margins suffered due to the light license contribution while maintenance and deferred revenue were stronger in the period; albeit, aided by currency.
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