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A Look at Symantec’s Key EPS Drivers

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Factors driving EPS growth

Symantec (SYMC) has maintained strong bottom-line growth in the last five quarters. This growth was buoyed by the successful integration of its Blue Coat Systems and LifeLock acquisitions, which produced high-cost synergies for the company. Symantec’s cost-saving goals for fiscal 2018 also contributed to its EPS growth.

Increased global cyberthreats have led to higher demand for security products, supporting Symantec’s top- and bottom-line results. The implementation of the tax reform laws in the United States may act as a strong catalyst for the company going forward.

From the graph above, we can see the growth of Symantec’s EPS in the last five quarters. During this period, Symantec’s bottom line increased at a CAGR (compound annual growth rate) of 13.2%.

Symantec’s EPS in fiscal Q4 2018 stood at $0.46, up 64.0% YoY (year-over-year). The company easily outpaced the Wall Street Journal estimate of $0.39 per share.

Guidance and hurdles for EPS growth

Symantec expects its non-GAAP EPS in fiscal Q1 2019 to be $0.31–$0.35. It expects its EPS for fiscal 2019 to be $1.50–$1.65.

A soft PC market has forced the company to increase its research and development expenses and sales and marketing costs, which could impact the company’s bottom line going forward. Higher integration costs associated with the company’s acquisitions may also affect its EPS growth.

Cybersecurity company FireEye (FEYE) reported fiscal Q2 2018 financial results (quarter ended March 2018). The company reported a loss of $0.04.

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