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Symantec (SYMC) to Report Q4 Earnings: What's in Store?

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Symantec Corporation is scheduled to report fourth-quarter fiscal 2019 results on May 9.

The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average positive surprise being 14.53%.

In the last reported quarter, the company benefited from strong growth in Consumer Digital Safety segment, and significant improvement in the Enterprise Security revenues, which came above expectations.

What to Expect in Q4?

For the fiscal fourth quarter, Symantec anticipates non-GAAP revenues in the range of $1.19-$1.22 billion. At mid-point, the guidance implies approximately flat revenues on an organic basis and in constant currency. The Zacks Consensus Estimate stands at $1.21 billion, indicating a decline of 1.14% from the year-ago quarter figure.

Non-GAAP operating margin is projected to be about 30%.

Further, management estimates earnings between 37 cents and 41 cents on a non-GAAP basis. The consensus estimate is pegged at 39 cents, indicating a decline of 15.22% from the year-ago reported figure.

Let's see how things are shaping up for the upcoming announcement.

Factors at Play

Symantec is gaining from data breaches as demand for cybersecurity-related products continue to shoot up. The company’s continuous efforts to strengthen its product suite are likely to benefit the top line in the quarter.

Management notes fiscal third and fourth quarters to be seasonally biggest for the Enterprise business. We therefore expect this segment to boost the to-be-reported quarter’s top line.

Symantec continues to benefit from Integrated Cyber Defense Platform, which drives significant cross-sell and up-sell opportunities. Moreover, in the to-be-reported quarter, Symantec is likely to benefit from the recent release of Managed Endpoint Detection and Response Service, which allows focused threat hunting service to the large installed base of endpoint security customers.

However, the Equifax breach in last fiscal year had led to a strong fourth quarter for the Consumer Digital Safety segment, which is expected to lead to tough year-over-year comparisons. Consumer Digital Safety revenues are expected between $595 million and $605 million, which is much lower compared to the prior-year quarter’s revenues of $613 million.

Furthermore, increased competition from the likes of Palo Alto Networks (PANW - Free Report) , Fortinet (FTNT - Free Report) and Qualys (QLYS - Free Report) poses a major headwind for the company.

Currently, Symantec carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

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