After putting together a solid rally last week, the tech sector is being plagued with stumbling blocks this morning. First, Cisco Systems and a handful of semiconductor companies were hit with downgrades. Now, Symantec has slashed its earnings outlook. Not a good start.
Before the open, Symantec (NASDAQ: SYMC) trimmed its third-quarter earnings and revenue forecast, citing a weaker-than-anticipated performance by its data center management business and higher deferrals than expected as a result of a greater proportion of enterprise maintenance contracts.
The software firm now expects earnings of 10-11 cents per share, down from its original range of 14-15 cents per share. The company is also forecasting revenue of $1.29 billion to $1.31 billion, versus its prior range of $1.315 billion to $1.149 billion.
Excluding items, earnings are forecast at 24-25 cents per share, compared to its original outlook of 29-30 cents per share. Furthermore, its revenue projection sits at $1.30 billion to $1.32 billion, down from $1.325 billion to $1.355 billion.
According to Zacks, the consensus estimate currently stands at 26 cents per share.
Looking ahead to the fourth quarter, Symantec forecasts earnings between four and six cents per share on sales of $1.24 billion to $1.27 billion. On an adjusted basis, earnings are expected at 18-20 cents per share, well below the consensus estimate of 32 cents per share.
The security could be the focus of some downgrades this morning following the negative news. Zacks currently reports that the firm has earned eight buy ratings, 11 holds, and just one sell rating.