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It has always been one of the ironies of technology spending: in survey after survey, CIOs and IT professionals will say that security is either their No. 1 priority, or near the top of the list. Yet, when the economy is in trouble and budgets are being squeezed, security spending is often one of the first areas that feels the impact.

There was evidence of that contradiction this week in the financial results of security vendor Symantec. The company reported fiscal first quarter results that fell short of expectations. The Cupertino, Calif.-based company said revenues came in at $1.43 billion for the quarter, a 13% drop from the year ago quarter. Net income dropped to $73 million or 9 cents per share, compared to $172 million, or 20 cents per share a year earlier.

On a non-GAAP basis, earnings came in at $285 million or 34 cents per share, while Wall Street was expecting earnings of 36 cents per share.

In a statement Chief Executive Enrique Salem said the economy was prompting corporations to look for ways to trim IT budgets or defer spending. “We are pleased with the performance of the consumer business,” he added. “On the enterprise side, some customers focused their spending on shorter-term contracts or maintenance renewals, resulting in fewer new license deals, but stronger deferred revenue.

While the first quarter was obviously disappointing, Salem said business has stabilized.
“We've laid the groundwork to drive improved execution in the second half of the fiscal year," he said.

Looking at spending by segments, Symantec said its storage and server management portfolio accounted for 38% or revenues, but saw a 17% year-over-year decline. The security and compliance segment represented 24% of revenue and encountered a 14% decline in business, and services represented 7% of revenues, and saw a 20% decline.

The consumer segment of the business held up the strongest but was also impacted by the economy. The consumer business accounted for 31% of revenues, or $453 million, but only saw a 4% year-over-year decline.

Here’s a look at the breakdown by segment and the year-over year comparison:

• Storage and Server Management - $553 million, -17%
• Consumer - $453 million, -4%
• Security and compliance - $342 million, -14%
• Services - $96 million, -20%
 

Comments (1)

	1. 07-31-2009 14:47
	McAfee doesn't seem to be having the same problems. The company reported better-than-expected revenues and profits yesterday and actually said it's seen an increase in the number of big deals.    Not to mention that McAfee continued its security-as-a-service push with the acquisition of e-mail security vendor MX Logic. Registered

Michael Eggebrecht

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