The company’s third fiscal quarter to December 31 saw revenue of $1.15bn compared to $695m in the year-earlier period. Net income was $90.7m, down from $163.6m a year before. Without merger-related items, income was actually up 5%.
During a conference call with analysts, chief executive John Thompson fielded questions mainly about the extent of the pricing pressure Symantec faces in the enterprise antivirus market, and what Microsoft Corp may do to shake up the consumer antivirus space.
On the enterprise security side, which grew sales 7% year-over-year in the December quarter, Thompson acknowledged that this heavily saturated market is getting aggressive, particularly in antivirus.
We continue to see increasing competition in the enterprise antivirus side of the market, he said. Negotiations for new and renewal business, especially in the SMB segment, are consistently aggressive.
But Thompson said that efforts by competitors to grab market share by reducing software prices before Microsoft’s entrance into the antivirus space, which is expected in the fourth quarter, were foolhardy.
He said Symantec will invest heavily this year in marketing to consumers, taking Microsoft head-on. He said technologies aimed at mitigating newer types of threats, like phishing and identity theft, will be Symantec’s competitive advantage.
I think they will create a certain amount of noise in the marketplace, Thompson said. I think it is highly unlikely that a lot of existing users are going to trust Microsoft to deliver the level of security they need.
But if Microsoft is true to form, over time they will certainly win some share of the marketplace, he acknowledged. We’re prepared for the battle. I’ve been in the industry 35 years, I’m looking forward to whooping on them again.
The consumer security space was 26% of Symantec’s revenue in the third quarter, down 10% mainly due to a new ratable method of recognizing revenue. Enterprise security was up 7% and represented 21% of revenue.
From the Veritas side of the house, storage management was up 9% and was 23% of total revenue. The Data Protection segment was 26% of revenue, up 16%. Services revenue was 4% of the total and was up 38% year-over-year.
