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How Did Symantec’s Operating Segments Perform?

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Fiscal 3Q16 marks the first quarter when Veritas won’t be a part of Symantec’s continuing operations

In the prior part of the series, we discussed Symantec’s (SYMC) recently announced fiscal 3Q16 results. Though Symantec managed to beat analysts’ expectations, the strong dollar (UUP) in 2015 impacted its growth. Fiscal 3Q16 marked the first quarter when Symantec’s earnings results included the Veritas business as a discontinued operation. On January 29, 2016, Symantec completed the sale of Veritas to the Carlyle Group.

Apart from Symantec, technology players like HP (HPQ) and eBay (EBAY) have given into rising investor pressure and announced their own splits.

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Operating segments’ performance

In fiscal 3Q16, Symantec’s License segment’s revenue rose 3% to $41 million while its Content, Subscription, and Maintenance segment’s revenues fell 7% to $868 million.

With the Veritas sale completed, Symantec is now left with the Consumer Security and the Enterprise Security segments. The above chart shows the proportionate contribution of the company’s segments towards overall revenue. In fiscal 3Q16, Symantec’s Consumer security segment’s revenues fell 10% to $414 million while the Enterprise Security segment’s revenues fell 3% to $495 million. In constant currency terms, the Consumer Security segment’s revenues fell by 6%, whereas Enterprise Security revenues rose 1% in 3Q16.

In a later part of the series, we will discuss various factors that impact Symantec’s operating segments as well as provide opportunities for growth.

Investors who wish to gain exposure to Symantec can consider investing in the PowerShares QQQ (QQQ). QQQ invests ~27% of its holdings in the application software space. It invests ~0.3% of its holdings in Symantec.

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