A Preview Of Symantec's Q3 Results

Symantec Corporation SYMC is scheduled to report its Q3:17 results after the close on Wednesday.

Wunderlich’s Bill Choi maintains a Buy rating on the company, with a price target of $30.

Q3 Expectations

“We're slightly adjusting our Q3 estimates for incremental FX headwinds of $18 million in revenue/$0.01 EPS, offset by good progress on cost savings and upside in BlueCoat, growth in endpoint/ATP protection, and DLP,” the analyst mentioned.

Choi expects the Lifelock Inc LOCK acquisition to close in FQ4:17.

The analyst believes Symantec’s shares will be driven by the company’s execution on its $550 million cost savings plan, potential revenue synergies with Blue Coat and Lifelock, as well as potential upside to the EPS guidance of $1.70–$1.80 for F2018.

For Q3:17, Choi expects Symantec to report revenue and EPS of $1.081 billion and $0.29, respectively, as compared to the earlier estimates of $1.09 billion and $0.29, respectively. The revenue is expected to beat the consensus expectations, while the EPS is likely to be in line.

FX Headwinds

However, the analyst also noted FX headwinds during the quarter, due primarily to the euro weakness.

“We believe better results from BlueCoat, endpoint protection, and DLP could partially offset the FX pressure,” Choi stated.

The enterprise segment is expected to beat the consensus expectations, while the operating margin is expected at 13.4 percent.

“Constant currency revenue declines have been moderating after Symantec implemented automatic renewals on consumer subscriptions,” the analyst added.