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Why Symantec’s Fiscal 3Q18 Earnings Failed to Impress Investors

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Dec. 4 2020, Updated 10:53 a.m. ET

Fiscal 3Q18 results

Symantec (SYMC) reported fiscal 3Q18[1. fiscal 3Q18 ended December 29, 2017] revenues and non-GAAP[2. generally accepted accounting principles] earnings per share of ~$1.2 billion and $0.49, respectively. Although the company’s earnings exceeded analysts’ expectations by $0.05, its revenues missed analysts’ expectations by $40.0 million.

Symantec’s revenues grew 13.0% on a year-over-year basis while its EPS (earnings per share) rose 53.0%. Symantec provided revenue guidance of $1.25 billion–$1.28 billion for fiscal 3Q18.

Noting that Symantec was unable to meet its guidance, Greg Clark, Symantec’s CEO, said, “Despite selling the business volume that we planned in our Enterprise segment, third quarter revenue came in below our guidance.”

He added, “This result was due to an increased ratable mix shift in our Enterprise segment. Adoption of our cloud solutions by enterprise customers accelerated during the quarter, which reduced in-period revenue recognition, but increased implied billings and deferred revenue.”

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Lower-than-expected fiscal 3Q18 revenues and guidance

On January 31, 2018, Symantec stock fell close to 5.0%. Symantec, a leading player in the cybersecurity space, announced its fiscal 3Q18 earnings on the same day.

Not only were Symantec’s  fiscal 3Q18 revenues were below analysts’ expectations and its previous guidance, its earnings guidance for the current fiscal year also were below the market expectations.

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