Symantec shares dropped 13 percent to $17.79 Tuesday after the company warned that its profits and revenue for the fiscal third quarter would be lower than anticipated.
This will be the second consecutive quarter that Symantec failed to meet financial analysts’ earnings estimates.
John Thompson, the Cupertino security software company’s chairman and chief executive, blamed the shortfall on higher corporate costs and weaker-than-expected performance of the company’s data center management business.
“Clearly, these results are not what we expected for the quarter,” Thompson said in a conference call with financial analysts.
The data center management unit, which sells storage and security software for corporate data centers, accounts for about one-quarter of the company’s revenue. It sells several software products acquired in the $10.2 billion acquisition of storage software maker Veritas in June 2005.
Thompson said much of the higher costs resulted from an overhaul of its business processes and enterprise resource planning software, an investment designed to streamline the company’s logistics from manufacturing to sale.
Symantec will release details of a cost-cutting plan along with its actual third-quarter results on Jan. 24, Chief Financial Officer James Beer said.
“While the results of the December quarter are clearly a disappointment, we are focused on moving forward and ensuring that we have an appropriate balance between our spending plans and revenue growth,” Thompson said.
Symantec said it expected to earn 10 cents to 11 cents a share this quarter, compared with its previous forecast of 14 to 15 cents a share. It also lowered its projected sales from a range of $1.32 billion to $1.35 billion to a range of $1.29 billion to $1.31 billion.
During the third quarter a year earlier, the company earned 8 cents a share on $1.15 billion in revenue.
“Symantec, unfortunately, continues to be a major work in progress, as indicated by its very weak outlook and disappointing results,” Friedman Billings Ramsey analyst Daniel Ives wrote in a research note Tuesday.
Contact Ryan Blitstein at rblitstein@mercurynews.com or (408) 920-5715.
