Security software giant Network Associates Inc announced strong preliminary results for the fourth quarter and twelve months ended December 31 but warned that new SEC guidelines concerning acquisitions could have a material effect on final results. Revenues for the fourth quarter are estimated at $272m, a 30% increase over the year-ago quarter and a 12% sequential increase from the third quarter. Full-year estimated revenue totaled $972m, representing a 34% increase over 1997’s total of $727m. Earnings per share for the fourth quarter are estimated at $0.47, a 62% increase over the same quarter of the prior year, and a 15% sequential increase. For the year, earnings per share should be $1.54, up 48% from last year. All figures are before non- recurring acquisition charges, stemming from the purchases of Dr Solomon’s and Trusted Information Systems. Along those lines, Network Associates has announced that it received a comment letter from the Securities and Exchange Commission concerning the SEC’s new guidelines on the write-off of in-process research and development. Although the company says its write-offs of in- process R&D were made in accordance with established industry practice at the time, final operating results for the quarter and year will probably be affected due to the changes. Thus, the company says it will not release a final earnings statement until it has resolved the matter with the SEC.
