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Symantec Shares Tumble On Q4 Warning; How Is The Rest Of Security Faring?

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Symantec Shares Tumble On Q4 Warning; How Is The Rest Of Security Faring?

Shares of Symantec Corporation (NASDAQ: SYMC) fell as much as 8 percent after the cybersecurity solutions provider cut its fourth-quarter outlook below Street view and announced the departure of CEO Michael Brown.

Security software makers such as Symantec have been on the receiving end, due to a fall in the sales of personal computers, which comes bundled with anti-virus software. They are now focusing on enterprise customers, who need cutting-edge solutions to protect themselves from sophisticated cyber attacks.

Symantec, which makes the popular Norton antivirus software, slashed its fourth-quarter earnings view to $0.22 from prior outlook of $0.24 to $0.27 and trimmed its revenue forecast to $873 million from previous range of $885 million to $915 million.

Related Link: Bad Juniper Data Could Be An Omen For More Tech Layoffs

Wall Street, on an average, expects earnings of $0.25 a share on revenue of $901.16 million, implying a year-over-year drop of 14 percent in earnings and 42 percent drop in sales. The company's current outlook implies a 24 percent decline in earnings per share and 44 percent fall in sales from last year.

Mountain View, California-based Symantec blamed the guidance cut to lower license revenue due to a shift in enterprise security customer buying preferences during the quarter. A faster than expected shift within the company's product mix to subscription and ratable contract structures also led to the revision.

Meanwhile, Symantec announced that President and CEO Brown would be stepping down and the company has begun a search for his successor. Brown "will continue to serve as CEO and as a director of the company until a successor has been appointed."

Symantec said it formed an "Office of the President" to provide continuity and focus on the company's strategic priorities amid its decision to focus exclusively on cybersecurity. In addition, Ajei Gopal is rejoining Symantec as chief operating officer and would be part of the "Office of the President."

Other executives who will be part of the "Office of the President" include Thomas Seifert, Symantec's executive vice president and chief financial officer and Scott Taylor, Symantec's executive vice president, general counsel and secretary. The Office of the President is expected to remain in place until a new CEO has joined the company.

Symantec will release its fourth-quarter results after the market closes on May 12, 2016. But, the company postponed its May 26 Financial Analyst Day, and said it will be "rescheduled at a later date."

Symantec's Effects

Below is a brief look at how the news from Symantec is impacting stocks of other companies in the sector.

  • Check Point Software Technologies Ltd. (NASDAQ: CHKP) initially rose 0.72 percent to $84.10, but has since traded around 0.18 percent up on the day at $83.65
  • FireEye Inc (NASDAQ: FEYE) was up 0.71 percent to $18.40 on the news, but has slid to $18.26
  • Palo Alto Networks Inc (NYSE: PANW) initially edged up 0.06 percent to $156.10, but has fallen 1.41 percent on the day to $153.81
  • Proofpoint Inc (NASDAQ: PFPT) initially gained 0.63 percent to $58.58, but was down 0.5 percent on the day at $57.92 at time of writing
  • Qualys Inc (NASDAQ: QLYS) initially rose 2.25 percent to $25.94, but was most recently seen up 1.73 percent on the day at $25.81
  • Imperva Inc (NYSE: IMPV) initially advanced 1.57 percent to $49.02, but has since fallen 0.17 on the day to $48.18

At time of writing, Symantec was down 5.3 percent on the day at $17.15.

 

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