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By Cara Garretson
Security giant Symantec announced second fiscal quarter results that were down 3 percent compared to the same period a year ago, but up slightly from the last quarter of this year, offering some evidence that IT spending is on the rebound.
Symantec, which develops a range of consumer and enterprise security products and services, reported revenue of $1.48 billion for its second fiscal quarter, the three-month period ending October 2. Net income for the period was $294 million, excluding charges, or $0.36 per share. That beat analysts' estimates by 3 cents a share.
The company attributed what CEO Enrique Salem described as "solid results" to strength in the consumer and small- and medium-sized business segments. And although sales of corporate-focused storage and server products were down 9 percent compared to the same period last year, those sales still made up 38 percent of total revenues for the quarter, according to company officials, adding that the company is seeing signs that enterprise IT spending may be stabilizing in the U.S.
"We are encouraged by the signs we see of stabilization in the markets we serve. This gives us confidence that we will continue to see gradual improvement in our business over the next few quarters," said Salem during Symantec's earnings call with analysts on Wednesday. Salem took over as CEO of the company in April when former chief John Thompson retired. Thompson remains chairman of the board.
Symantec continues to see storage customers making purchases to suit their current needs, instead of signing licensing deals to accommodate future growth, said Salem. The slowdown of the server market in general has put pressure on the company's server software sales, he added, particularly for products that run on Sun's server hardware.
However, Salem added that the company has seen the decline in new license sales stabilize, and renewal of maintenance contracts with existing customers remains strong. The company is also seeing sequential growth in its software-as-a-service initiatives for its securing offerings, particularly in sales of its hosted Web security services.
Salem's tone in announcing the most recent quarter's results was more positive than the last time the CEO reported Symantec's revenue and earnings, which happened in July. Then the CEO said the company's consumer business was holding strong, but corporate spending was still being curtailed because of the economy.
"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," he said in July.
For its third quarter, Symantec is estimating earning of $0.36 or $0.37 per share on revenue of $1.5 billion.
Symantec isn't the only company to forecast improved enterprise IT spending based on quarterly results in the past few weeks; executives at EMC, IBM, and Intel all spoke positively about IT budgets rebounding in the coming months.
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