Symantec (SYMC) Tops Q3 EPS by 5c, Miss on Revenues; Offers FY18 EPS/Revenue Outlook Below Consensus

Symantec (NASDAQ: SYMC) reported Q3 EPS of $0.49, $0.05 better than the analyst estimate of $0.44. Revenue for the quarter came in at $1.23 billion versus the consensus estimate of $1.27 billion.

Financial and Business Q3 Highlights

• Q3 GAAP revenue $1.209 billion, up 16% year-over-year; non-GAAP revenue $1.234 billion, up 13% year-over-year
• Double digit year-over-year deferred revenue growth
• Enterprise segment delivered strong implied billings growth; revenue below guidance range due to accelerating mix shift to ratable business
• Consumer Digital Safety segment achieved high end of revenue guidance range
• Operating margins beat Q3 GAAP and non-GAAP guidance; continued cost and operating efficiencies
• Revenue, operating margin and earnings per share guidance being reduced for Q4 and fiscal year 2018 due to Enterprise ratable mix shift
• Cash flow from operations in fiscal year 2018 expected to be near the high-end of prior guidance range
• Enterprise customers accelerating adoption of Symantec’s cloud solutions

“Despite selling the business volume that we planned in our Enterprise segment, third quarter revenue came in below our guidance,” said Greg Clark, Symantec CEO. “This result was due to an increased ratable mix shift in our Enterprise segment. Adoption of our cloud solutions by enterprise customers accelerated during the quarter, which reduced in-period revenue recognition, but increased implied billings and deferred revenue. Cloud adoption is positive for our customers and a long term benefit for our business. At the same time, our Consumer Digital Safety segment delivered revenue at the high end of our prior guidance range and continues to be a growth driver for the company. Company operating margins exceeded our expectations and we generated strong cash flow from operations. Our Integrated Cyber Defense platform and Consumer Digital Safety solutions are resonating with customers and we expect continued momentum in the fourth quarter.”

GUIDANCE:

Symantec sees Q4 2018 EPS of $1.60-$1.64, versus the consensus of $1.68. Symantec sees Q4 2018 revenue of $4.915-4.945 billion, versus the consensus of $5.05 billion.

For earnings history and earnings-related data on Symantec (SYMC) click here.

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