Symantec: Fiscal 1Q16 Financial Results

(in $ million)	1Q15	1Q16	Growth
Revenue	1,735	1,499	*-14%*
Net income (loss)	236	117	-50%

Symantec Corp. reported the results of its first quarter of fiscal year 2016, ended July 3, 2015.

Michael A. Brown, president and CEO, said: “We made encouraging progress in several product segments, achieving growth in our enterprise security business for the first quarter in two years. However, our revenue was flat in Q1, adjusting for currency and an extra week in the June 2014 quarter. Reaching a definitive agreement to sell Veritas marks an important inflection point for Symantec. With a strong product pipeline of more than a dozen enterprise security products on track to be released this year, Symantec is now focused on extending its lead as the world’s largest cybersecurity company.”

Thomas Seifert, EVP and CFO, said: “The $8 billion sale price for Veritas delivers a certain and attractive valuation, and simplifies the separation process. We remain committed to returning significant cash to shareholders, by announcing an increase to our share repurchase authorization to $2.6 billion. We also intend to maintain our dividend at 15 cents per common share, which represents an increased and attractive payout ratio for a company of Symantec’s size post-separation.”

Symantec’s board of directors has declared a quarterly cash dividend of $0.15 per common share to be paid on September 16, 2015 to all shareholders of record as of the close of business on August 26, 2015. The ex-dividend date will be August 24, 2015.

Board of directors has also authorized an increase to its share repurchase program to $2.6 billion.

Comments

Mike Brown, president and CEO:
"Q1 was disappointing as our revenue was flat in a quarter with significant complexity.
"Moving to our Information Management segment; we expanded operating margin to 23% from 14% in the prior year and revenue grew by over 3% driven by continued strength in NetBackup and appliances."

Thomas Seifert, CFO:
"Information Management revenue increased 3% to $587 million. NetBackup software and appliances grew 10% and 19%, respectively. This strength was offset by weakness in our Backup Exec and Information Availability offerings. Non-GAAP operating margin for the IM segment increased by 11.4 percentage points year-over-year to 23%, driven by cost reductions and an increase in revenue.
"Now moving on to guidance; for the September 2015 quarter, we are providing guidance for a combined Symantec that includes Veritas. We expect to move the Information Management business results and balance sheet to discontinued operations, starting in the December quarter and we will adjust our full year guidance during our November earnings call to reflect this change.
"Our September 2015 quarter guidance assumes an exchange rate of $1.11. We expect revenue to be between $1.485 billion to $1.525 billion, up slightly quarter-over-quarter at the midpoint. We expect operating margin to be between 26% to 28%, resulting in EPS in the range $0.40 to $0.43."