1Q16 earnings review
On August 11, 2015, Symantec (SYMC) announced its fiscal 1Q16 results. The company posted revenue and non-GAAP (generally accepted accounting principles) EPS (earnings per share) of $1.5 billion and $0.40 per share, respectively. Symantec failed to meet analysts’ expectations. They were expecting the company to post revenue and EPS of $1.8 billion and $0.43 per share, respectively. Its revenue and EPS fell by 14% and 11% on a YoY (year-over-year) basis, respectively.
According to Symantec’s CEO, Michael Brown, the fiscal 1Q16 revenue was flat when “adjusting for currency and an extra week in the June 2014 quarter.” The US dollar (UUP) appreciated. It impacted Symantec’s revenue in fiscal 1Q16. It also impacted IBM (IBM) and Microsoft (MSFT) in their recent quarters. Regarding its expectations from fiscal 2Q16, Symantec provided subdued guidance. All of these incidents pressured its share price. It fell by ~8% on August 12, 2015.
The Carlyle Group buys Veritas for $8 billion
Along with its fiscal 1Q16 results, Symantec announced the sale of its Information Management business, Veritas, to The Carlyle Group for $8 billion in a separate release. According to Bloomberg, The Carlyle Group’s acquisition of Symantec’s Veritas for $8 billion is the biggest LBO (leveraged buyout) deal in the US in 2015 to date. Symantec acquired Veritas for $13 billion in 2005. Before finalizing the deal with The Carlyle Group, Symantec had approached storage companies like EMC (EMC) and NetApp (NTAP) along with some PE (private equity) firms to sell Veritas.