Symantec (Nasdaq: SYMC), the largest provider of security software, reported flat revenues and fourth-quarter earnings because it sold fewer software licenses. It also forecast lower earnings for at least another quarter.
The developer of Norton Anti-Virus software and other products had pre-announced that lower revenue had trimmed per-share earnings to only 38 cents from the previous estimates of 42 cents, on revenue around $1.69 billion.
Symantec confirmed the warnings Wednesday as CEO Enrique Salem said he was encouraged because customers are moving to buy security from the cloud, or the Internet, rather than directly.
Still, the software company forecast first-quarter weakness. Estimated revenue will be about the same as last year's $1.65 billion, it said, with operating earnings of 37 cents or 38 cents a share compared with 40 cents last year.
A year ago, the Sunnyvale, Calif., software company reported fourth-quarter earnings of 38 cents a share on revenue of $1.67 billion.
Salem blamed slower shipments of PCs that require the products, perhaps because consumers await the shipment of the new Windows 8 from Microsoft (Nasdaq: MSFT), the world's biggest software company, later this year.
As well, Symantec's storage business was weaker than expected, lowering both quarterly sales and profit.
Shares of the security software giant dipped 10 percent last week on the pre-announcement news. They closed Wednesday at $16.43, down 2 cents, giving the company a market capitalization of $11.9 billion, well below their 52-week high of $20.50. Over the past year, they've fallen 16 percent despite the increase in cyberattacks and data breaches.
Analysts have raised questions whether the company might need to restructure, possibly changing its product mix, much of which came through acquisition of companies like Veritas Software and Verisign. Others wondered if it was just having problems changing from traditional ways of selling software built into systems to contemporary software-as-a-service models.
At Jefferies, analyst Aaron Schwartz kept Symantec a buy with a target of $20 but said it experienced a purchasing pause ahead of refreshment of its BackupExec and NetBackup products scheduled later this year.
At FBR Capital, analyst Daniel Ives maintained an Outperform rating on the company because, he said, it should benefit from new product releases in the new fiscal year that began last month.
So far in 2012, Symantec shares are up 5 percent, compared with rivals including Check Point Software Technologies (Nasdaq: CHKP), up 10.6 percent, and Imperva (Nasdaq: IMPV), flat for the year but up 45 percent from its November initial public offering.
Intel (Nasdaq: INTC), the No. 1 chipmaker, now owns Symantec's biggest rival, McAfee, which also installs security software in PCs and servers.
For the fourth quarter, net income more than doubled to $559 million, or 76 cents a share, from $168 million, or 22 cents, but that reflects the one-time gain from the sale of the company's stake in a joint-venture with China's HuaWei Telecommunications.
Symantec also reported cash and investments of $3.2 billion.