Symantec (NASDAQ:SYMC) reported fourth quarter and full year fiscal 2012 earnings late Wednesday. While the fourth quarter results showed some revenue weakness, the overall results for the year shows positive trends.
For the fourth quarter, Symantec reported revenue of $1.68 billion, which is flat on a year-over-year (YoY) basis. For the full year, revenue was reported at $6.73 billion, which is a 9 percent YoY gain. Net Income for the fourth quarter was reported at $559 million, up from $168 million in the fourth quarter of 2011. Symantec reported that earnings per share were $0.76, including the one-time impact from the sale of Symantec’s share of the Huawei-Symantec joint venture.
"Despite the March quarter results, fiscal year 2012 was a record year for Symantec," Symantec CEO Enrique Salem said during the company's earnings call. "We executed on our strategy to strengthen our core businesses, while continuing to grow our emerging businesses."
Symantec CFO James Beer commented during the call that during the quarter there was a year-over-year decline of 26 percent in license sales, in part as a result of record license sales in the year-ago period and the continuing shift towards subscription-based products and services.
The shift toward subscription and cloud-based services is a key trend that Symantec expects to grow in the months ahead. Salem noted that Symantec's .cloud and Managed Security Service businesses are doing particularly well as customers try to deal with the changing threat landscape.
"So my expectation is you're going to continue to see a shift to the subscription businesses," Salem said.
The shift to the subscription businesses is a trend that is also reflected in Symantec's full year earnings. Subscription revenue grew by 15 percent in fiscal 2012 and accounted for 43 percent of total revenue compared to 39 percent of revenue in fiscal 2011.
One area of weakness for Symantec was its Storage and Server Management segment that decreased by five percent on a YoY basis. That decrease was attributed to a 'pause' in sales before the launch of Symantec's new Backup Exec product.
Salem also noted that in Symantec's Storage Management area, they have been doing a lot of work on the HP-UX platform. That work comes by way of a reseller OEM agreement with HP that has seen a slowdown in billings. Future growth for Symantec's Storage Management business is expected to come from increased use of virtualization as well as a shift toward Red Hat Enterprise Linux.
"So you're seeing a headwind in that business on some of the more traditional platforms and some opportunities around the new platforms of virtualization and Linux," Salem said.
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