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Symantec Stabilizes and Exceeds Expectations

Symantec Corp. may be a top provider of anti-virus software but its recent outstanding sales performance still surprised many analysts.  Symantec’s performance exceeded predictions during the second quarter.  It was considered a sign of stabilization of the company based in Cupertino, California.

Trading details

During a morning trading, Symantec shares rose by 9.3% to $17.19.  On October 21, 2009, Symantec was reported to have earned $150 million because each share was priced at 18 cents each.  A share was only 15 cents earlier this year.   So, total earnings only totaled to $126 million.  However, Symantec Corp. did experience a little dip from last year’s $312 million earnings.  This year, the company only enjoyed a $294 million.  This is because last year’s unit share price was at 37 cents.  This year, shares are a little bit cheaper, at 36 cents each.  Still, the 36 cents unit price was still much better than the 33 cent forecast for Symantec shares.  Also, while analysts predict the 36 cents to go steady during the third quarter, the company itself predicts a return to the 37 cents per share price.  In the same way, analysts predict a total earning of a little less than $1.5 billion; Symantec is more optimistic, believing that there will be a $1.51 billion earning for the company.

The man behind the success

Some people attributed Symantec’s recent success to new CEO, Enrique Salem.  Salem took the CEO post in April.  He focused on improving operations and sales instead of looking for new acquisitions.  Improving on what was already present was what made Salem effective.  His predecessor was more into acquisitions.  Improved sales really made Symantec exceed expectations.  Under this very new management, deals were made to include Symantec in the software pack provided to new computers.  Being included in the bundle for users to test helped users see its good features.  Symantec was able to make the right connections.

Improved estimates: A good challenge or a terrible pressure?

Because of Symantec’s good performance, which exceeded analysts’ predictions, analysts now cite higher estimates for 2010 and 2011.  Jefferies & Co’s Katherine Egbert raised her expectations by a dollar.  Even Baird analyst, Steven Ashley increased his estimates.  While this may be a good challenge to currently successful Symantec Corp., this could be a lot of pressure as well.  Symantec’s earnings took a slight fall from $312 million to $294 million.  This prompted low expectations.  Symantec exceeded those low expectations.  Now, what will happen when the expectations are high? Will Symantec crumble under the pressure?

On the lookout

What shareholders can do is to keep a vigilant watch at share prices’ rise and falls.  Anyway, this should be done whatever product it is you have a share of in this case symantec products.  If Symantec continues its success because of good management, expectations may continue to rise that it is not too difficult to imagine for the actual results to fall short.

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