Symantec delivers solid fiscal third quarter operating results

Gaap revenue for the quarter was $1.51bn and non-Gaap revenue was $1.54bn. Symantec delivered stronger than expected results on all of its key financial metrics in the fiscal third quarter.

Quarterly Results

Gaap Results: Gaap net loss for the third quarter was $6.81bn compared with net income of $132m for the same quarter last year.

The Gaap net loss for the third quarter of fiscal year 2009 includes a non-cash goodwill impairment charge of approximately $7bn.

Based on a combination of factors, including the current economic environment and a decline in our market capitalization, we concluded that there were sufficient indicators to require us to perform an interim goodwill impairment analysis. We have not completed the goodwill impairment analysis and expect to finalize it during the fourth quarter of fiscal year 2009. We may make an adjustment to this charge when the goodwill impairment analysis is completed.

Gaap deferred revenue at the end of the quarter was $2.92bn compared with $2.88bn for the same quarter last year. Cash flow from operating activities for the third quarter was $402m compared with $462m for the same quarter last year.

Non-Gaap Results: Non-Gaap net income for the third quarter of fiscal year 2009 was $350m, up 20% compared with $292m for the same quarter last year. Non-Gaap diluted earnings per share were $0.42, up 27% compared with earnings per share of $0.33 for the year ago quarter.

Non-Gaap deferred revenue was $2.96bn, up 2% compared with $2.90bn at the end of the third quarter of fiscal year 2008.

For a detailed reconciliation of our Gaap to non-Gaap results, please refer to the attached condensed consolidated financial statements.
During the third quarter of fiscal year 2009, we repurchased 16.1m shares, equivalent to $200m. There is $400m remaining in the current board authorized stock repurchase plan.

"Effective sales execution and our team's ability to successfully highlight the near-term ROI benefits of our solutions enabled us to deliver stronger than expected revenue against the backdrop of a challenging global economy,"

said Enrique Salem, chief operating officer, Symantec.

"The combination of top-line revenue growth, ongoing share repurchases and tight expense management has enabled us to achieve our seventh consecutive quarter of double-digit non-Gaap earnings growth. We are well-positioned to continue our success and emerge from this economic downturn as a stronger company."

Business Segment and Geographic Highlights
For the quarter, Symantec's Storage and Server Management segment represented 37% of total non-Gaap revenue and grew 1% year-over-year. The Consumer business represented 29% of total non-Gaap revenue and grew 2% year-over-year. The Security and Compliance segment represented 26% of total non-Gaap revenue and declined 5% year-over-year. Services represented 8% of total non-Gaap revenue and grew 20% year-over-year.
International revenue represented 50% of total non-Gaap revenue in the third quarter of fiscal year 2009 and declined 5% year-over-year. The Europe, Middle East and Africa region represented 31% of total non-Gaap revenue for the quarter and declined 9% year-over-year. The Asia Pacific/Japan revenue for the quarter represented 14% of total non-Gaap revenue and grew 1% year-over-year. The Americas, including the United States, Latin America and Canada, represented 55% of total non-Gaap revenue and increased 7% year-over-year.

Currency Impact

Foreign currency movements negatively impacted non-Gaap revenue by approximately 4%age points year-over-year and non-Gaap deferred revenue by approximately 2%age points year-over-year. Foreign currency movements negatively impacted EMEA non-Gaap revenue by approximately 10%age points and APJ non-Gaap revenue by approximately 2% age points year-over-year.

Quarterly Highlights

Symantec signed 448 agreements worldwide with a contract value of more than $300,000 each. Of the 448 agreements, 104 had a value of more than $1m. In the third quarter of fiscal year 2009, 84% of these large transactions included multiple products.

Symantec signed new or extended agreements with customers including Continental Airlines, the fourth-largest U.S.-based airline serving more than 300 destinations globally; Yamaha Corporation of America, which offers a full line of musical instruments and audio/visual products to the U.S. and Canadian markets; Japan Tobacco, a leading global tobacco company; IXE Banco, providing financial services in Mexico with a focus on corporate and business banking and high net worth individual investors; Telefonica Moviles Argentina S.A., the leading mobile telecommunications provider in Argentina with more than 15m customers; Canadian Tire Corporation, retailer of automobile supplies and service, fuel, apparel, and financial services throughout Canada; and SK Telecom, the leader in Korea's information communication industry.

Fourth Quarter Fiscal Year 2009 Guidance

Guidance assumes an exchange rate of $1.32 per Euro for the March 2009 quarter versus the actual weighted average rate of $1.50 per Euro and the end of period rate of $1.58 per Euro for the March 2008 quarter.

For the fourth quarter of fiscal year 2009, ending April 3, 2009, Gaap revenue is estimated between $1.475bn and $1.525bn. Gaap diluted earnings per share are estimated between $0.12 and $0.14. Gaap deferred revenue is expected to be in the range of $2.972bn and $3.072bn.
Non-Gaap revenue for the quarter is estimated between $1.49bn and $1.54bn. Non-Gaap diluted earnings per share are estimated between $0.33 and $0.35. Non-Gaap deferred revenue is expected to be in the range of $3.0bn and $3.1bn.