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Key overview of Symantec’s 2Q15 earnings

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2Q15 earnings in line with estimates

On November 5, 2014 Symantec Corporation (SYMC) announced its fiscal 2Q15 quarterly earnings. It reported revenue and EPS (earnings per share) of $1.617 billion and $0.48, respectively. The company’s reported revenues were in line with analysts’ estimates. However, the company did beat estimates on the profit front. Analysts were expecting revenues and EPS of $1.62 billion and $0.43 per share, respectively. Revenues earned in 2Q15 declined 1% on a year-over- year basis primarily due to restructuring in the Consumer Security software business.

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According to the International Data Corporation (or IDC), Symantec commands ~13% to 14% of the market share. EMC Corporation (EMC) leads the purpose-built backup appliance (or PBBA) market with ~60% of the market share. Symantec and IBM (IBM) held ~13% to 14% and ~5% to 6% of the market share, respectively.

ETFs that have significant exposure to Symantec include the PowerShares QQQ Trust ETF (QQQ) and the Technology Select Sector SPDR Fund (XLK). These ETFs are likely to benefit when the company posts positive results.

Change in the reporting structure

Symantec has modified its reporting structure in accordance with its impending split in 2Q15. The new segments and their contributions toward overall revenues will include the following:

  • Consumer Security. This segment will include consumer security businesses previously reported in User Productivity & Protection.
  • Enterprise Security. This segment will include enterprise security businesses previously reported in User Productivity & Protection.
  • Information Management. There will be no changes to this segment.

Of all the reporting segments, Information Management is the only operating segment that registered a positive growth of 3% on a year-over-year basis.

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