Symantec Corporation (SYMC) reported fourth quarter 2010 earnings per share of 40 cents, exceeding the Zacks Consensus Estimate of 33 cents.

Revenue

Symantec reported fourth quarter 2010 GAAP net revenue of $1.53 billion, up 3.0% from $1.47 billion reported in the year-ago quarter. Non-GAAP revenue for the quarter was $1.53 billion, up 3.0% from $1.49 billion reported in the year-ago quarter. The increase in sales  may be attributed to the efficiency of the sales team, which continue to utilize the broader Symantec portfolio and take advantage of the cross-sell and up-sell opportunities.

Coming to business segments, Symantec’s Consumer segment contributed 31.0% of the total revenue, up 9.0% from the year-ago quarter. The Security and Compliance segment contributed 24.0% of total revenue up 2.0% from the year-ago quarter. The Storage and Server Management segment contributed 38.0% of total revenue, down 1.0% from the year-ago quarter. The Services segment contributed 7.0% of total non-GAAP revenue and increased 8.0% year-over-year.

As per geographic segments, International revenue generated almost 50.0% of total non-GAAP revenue in the fourth quarter and increased 3.0% on a year-over-year basis. The EMEA (Europe, Middle East and Africa) region generated 30.0% of total non-GAAP revenue for the quarter and registered 2.0% year-over-year growth. The APJ (Asia Pacific/Japan) generated 15.0% of total non-GAAP revenue, which increased 5.0% year over year. The Americas (which includes the United States, Latin America and Canada) generated 55.0% of total non-GAAP revenue and increased 3.0% year-over-year

Operating Results

Gross margin on a GAAP basis was 81.5% in the fourth quarter, up from 80.0% reported in the year-ago quarter. Excluding special items, like stock compensation, amortization of acquired products and deferred revenue, the non-GAAP gross margin for the quarter remained almost flat at 85.1%, compared to 85.7% reported in the year-ago period. Gross margin increased as the total cost of revenue decreased substantially by 10.0% while there was a 4.0% increase in revenue.

Operating margin on a GAAP basis was 16.1% for the fourth quarter, compared with an operating loss margin of 13.1% for the same quarter last year. Excluding special items, non-GAAP operating margin for the fourth quarter of fiscal year 2010 was 28.3%, down from 30.4% reported in the year-ago quarter.

Net income on a GAAP basis for the fiscal fourth quarter was $184.0 million compared with a net loss of $264.0 million for the same quarter last year. This resulted in GAAP earnings per share of $0.23 compared to loss per share of $0.32 for the same quarter last year.

Including special items like stock compensation, litigation settlement, non-cash interest expense and stock based compensation, non-GAAP net income for the fiscal fourth quarter was $327.0 million, compared to $318.0 million reported in the year-ago quarter, resulting in a non-GAAP earnings per share of $0.40, compared with earnings per share of $0.38 for the year-ago quarter.

Balance Sheet & Cash Flow

The company generated cash flow from operating activities of $1.69 billion in the fourth quarter of fiscal year 2010 and spent around $189.0 million to repurchase 11.2 million shares at an average price of $16.93. Symantec ended the quarter with cash, cash equivalents and short-term investments of $3.04 billion.

Guidance

For the first quarter of 2011, GAAP revenue is estimated at between $1.48 billion and $1.50 billion. GAAP diluted earnings per share are estimated to be between $0.16 and $0.17. The company expects GAAP deferred revenue in the range of $3.06 billion and $3.09 billion.
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