Will Symantec Beat Expectations…Again?

Symantec Corporation SYMC is scheduled to report its fourth quarter financial results after the market closes on Thursday and, according to Estimize, the Street expects earnings in line with the company guidance, while the crowd is slightly more bullish.

The software provider guided, for the first quarter of 2015, earnings of $0.44 per share on revenue of $1.555 billion. Wall Street analysts’ consensus earnings estimate also stands at $0.44 per share (on revenue of $1.56 billion).

The crowd is more optimistic and projects earnings of $0.47 per share on revenue of $1.567 billion.

As seen in the chart above, Symantec has managed to comfortably surpass consensus estimates for at least the last eight quarters.

Current estimates and guidance imply a considerable quarter-over-quarter decline in earnings (see table below), and pretty much flat year-over-year growth.

In fact, the company has registered higher earnings and revenue in all of the past six quarters.

The True Value Of Veritas

In a recent report, analysts at Jeffries upgraded shares of Symantec from Underperform to Hold, and raised their price target from $20 to $21. The analysts see no negative catalysts for the company until late-July, and a better than expected outlook for Veritas.

An article recently published at Benzinga explains that, “Any potential downside risk to the stock is likely to be mitigated by the upside from the sale of Veritas. The company's FY17 growth guidance is higher than the street consensus.”

The analysts added, "This bucks the trend of several years of share losses, and is backed by more credible product vision than we've heard in some time...We increase our Veritas value from $4.7bn to $6.8bn in our SOTP, and see scenarios yielding upwards of $10bn in a sale financed with 40% debt."