Symantec Earnings Preview: New Acquisition And Innovations To Benefit The Top-line

by Trefis Team
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The world’s leading antivirus software company, Symantec (NYSE:SYMC), will release its Q4 and full year FY’17 earnings on May 10th. For the first nine months of FY’17, the company’s revenues have risen by 6.4% primarily because of the benefits from the Blue Coat acquisition which was completed in mid-2016. During this period, the non-GAAP EPS increased by 12.3% because of cost savings and synergies from the Blue Coat product integration. The company has a $400 million cost savings program going on, out of which it had guided to save $200 million by the end of FY’17, and its benefits can reflect in Q4 earnings as well.

In Q4’17, the consumer security revenues will benefit slightly from the LifeLock acquisition which was completed in February. Apart from this, there can be some benefits to the enterprise security business from the new innovations introduced in the cloud security platform.


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LifeLock’s First Quarter With Symantec

LifeLock deals in identity theft protection, and has recently gained traction because of a surge in the amount of personal data being uploaded by the smart phone users. According to IBIS World, the identity theft protection market has grown slowly, but steadily at 2.4% to reach $3.2 billion in 2015. LifeLock is expected to add around $100 million to the consumer security division of Symantec during Q4 results.  This will be a boon for the consumer business of Symantec, whose revenues were falling at an annual rate of 18% before this acquisition.

Symantec Continued To Innovate In Cloud Security

After the acquisition of Blue Coat last year, Symantec has continuously focused on tapping the enterprise cloud security market which is likely to experience a boom as the large enterprises are looking to shift their databases and operations on to the cloud. Keeping this in view, Symantec released the new versions of its cloud security platform in Q4, which is compatible with both Amazon AWS and Microsoft Azure cloud. Leveraging the expertise of Blue Coat, it has now integrated its Data Loss Protection (DLP) with cloud-delivered web security service (WSS). The advancements in cloud security have become necessary to sustain the growth in highly competitive enterprise security business, in which Symantec has experienced a 16% revenue growth during the first nine months of FY’17. The benefits of new innovation are likely to have trickled down to the fourth quarter as well.

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