May 06, 2009, 8:07 PM — Citing a slowdown in sales of its security and compliance products and weakness in international currencies, Symantec said Wednesday that it would post a US$249 million loss for the quarter ending April 3.
Sales at the storage and security company totalled $1.47 billion for the quarter, the final period of its fiscal 2009 year. That's down nearly 5 percent from the year-ago quarter, thanks in large part to a 22 percent drop in software licensing revenue.
The company is trying to rein in costs in the midst of a global recession and a change in management. Symantec switched CEOs at the end of the quarter, with Enrique Salem taking over from former CEO John Thompson in early April. Late last year Symantec laid off staff throughout the company. It hasn't said how many positions it terminated, but the cuts amounted to 4.5 percent of total salary costs.
On Wednesday, Salem indicated that he doesn't anticipate any more job cuts, so long as current economic conditions do not deteriorate further. "We think we've got our cost structure where it needs to be," he said in an interview.
While the company posted slight declines this quarter in its dominant storage and consumer businesses, its Security and Compliance division, which makes up about 25 percent of Symantec's business, was hardest hit. Revenue in that group dropped 14 percent year-over-year.
Results in these segments were affected by weakening international currencies, but security sales in particular were hurt as some customers moved away from multiyear software licenses, Salem said. "We're seeing a shortening of that to more one-year deals," he said. "I think that's indicative of the environment we're in."
Symantec's rival McAfee bucked general economic trends last week, reporting that its sales were up 21 percent year-over-year.
Another factor affecting Symantec's earnings was a $413 million goodwill writedown. Symantec has acquired dozens of companies over the past few years, and it began analyzing and writing off some of the goodwill value on its books in late 2009. That analysis is now complete, the company said.