Symantec announces $200 million in cost savings target

Symantec Corp. today reported results for the third quarter of fiscal year 2007, ended Dec. 29, 2006. GAAP revenue for the quarter was $1.313 billion and non-GAAP revenue was $1.324 billion. Non-GAAP revenue grew 6 percent over the comparable period a year ago.

GAAP deferred revenue at the end of the December 2006 quarter was $2.46 billion. Non-GAAP deferred revenue at the end of the quarter reached $2.49 billion, growing 25 percent compared to the December 2005 quarter.

GAAP Results: GAAP net income for the fiscal third quarter was $114 million, compared to $91 million for the same quarter last year. Diluted earnings per share was $0.12 compared to $0.08 per share for the same quarter last year.

Non-GAAP Results:

Non-GAAP net income for the fiscal third quarter was $248 million, compared to $282 million for the same quarter last year. Non-GAAP diluted earnings per share was $0.26 in both periods. For a detailed reconciliation of our GAAP to non-GAAP results, please refer to the attached consolidated financial statements.

"With a disappointing quarter behind us, we are moving to better align our costs with our new revenue expectations," said John W. Thompson, Symantec chairman and chief executive officer. "I am confident that we have the right strategy in place; however, we must sharpen our execution."

Financial Highlights

For the quarter, Symantec's Consumer business represented 31 percent of total revenue and grew 24 percent year-over-year on a non-GAAP basis. Services represented 4 percent of total revenue and grew 8 percent year-over-year. The Security and Data Management business represented 39 percent of total revenue and grew 3 percent year-over-year. The Data Center Management business represented 26 percent of total revenue and declined 8 percent year-over-year.

International revenues represented 50 percent of total revenue in the third quarter and grew 7 percent year-over-year on a non-GAAP basis. The Asia Pacific/Japan revenue for the quarter represented 14 percent of total revenue and grew 11 percent year-over-year. The Americas, including the United States, Latin America, and Canada, represented 55 percent of total revenue and increased 5 percent year-over-year. The Europe, Middle East, and Africa region represented 31 percent of total revenue for the quarter and grew 5 percent year-over-year.

Cost-Saving Initiative

In order to align costs with new revenue expectations, Symantec plans to reduce its cost structure by $200 million. The company has identified a number of areas to achieve its target: reduce new hires; reduce contractor and consulting spending; reduce travel spending; consolidate additional facilities; and reduce the current workforce in certain business functions and geographies - Symantec.