Symantec CEO Credits New Leadership For Enterprise Security Success

Symantec CEO Greg Clark said the company has benefited from a restructuring in its enterprise security business that separated the product and selling functions.

"This is definitely helping us as we go forward," Clark told Wall Street analysts during the company's earnings call Thursday. "We have very focused and concentrated energy on the product side and also on the field side."

The company's Enterprise Security business delivered sales for the quarter that were $31 million above the top end of Symantec's guidance range due to a higher mix of sales yielding upfront revenue than the company had anticipated. And Clark said Symantec continues to see a healthy pipeline for the company's Enterprise Security business thanks to tailwinds in the cyber defense market.

[Related: Symantec CEO: Our Endpoint Security Is More Effective Than Our Peers]

Thursday's comments were in marked contrast to Clark's comments a quarter ago, when he expressed concern about "momentum loss" in that segment of the business, noting that implied billings had fallen 3 percent on an adjusted year-over-year basis due to longer sales cycles in the company's large, multi-platform platform sales.

Since then, Symantec brought in former Skyport Systems president and CEO Art Gilliland to oversee Symantec's product and engineering teams, the Enterprise Security customer support organization, and the Security Technology and Response (STAR) research team. Gilliand previously worked at Symantec from early 2006 to mid-2012, where he led the company's enterprise information security business.

In addition, Symantec expanded the responsibilities for SVP of Worldwide Sales Marc Andrews, who has spearheaded engagement with the company's largest customers, transactions and partners since 2016. The restructuring also resulted in the resignation of President and COO Michael Fey, meaning that Andrews would now be reporting directly into Clark.

"That transformation is going well for us," Clark said. "We feel like that organizational change is going well."

Sales for the quarter ended Dec. 28 came in at $1.21 billion, which is virtually unchanged from last year. On a non-GAAP basis, sales for the quarter ended Dec. 28 fell to $1.22 billion, down 1.3 percent from $1.23 billion a quarter earlier. This beat Seeking Alpha expectations of $1.18 billion.

The company reported net income of $65 million, or $0.10 per diluted share, down 95.2 percent from net income of $1.34 billion, or $2.01 per diluted share, the year before. On a non-GAAP basis, net income sunk to $285 million, or $0.44 per diluted share, down 13.1 percent from $328 million, or $0.49 per diluted share, the year prior. That exceeded Seeking Alpha's earnings per share projection of $0.39.

Enterprise security sales dropped to $609 million, down 2.6 percent from $625 million the year prior. Consumer digital safety revenue, though, jumped to $602 million, up 3.1 percent from $584 million last year.

For the coming quarter, Symantec expects non-GAAP earnings of $0.37 to $0.41 per diluted share on adjusted sales of $1.19 billion to $1.22 billion. Analysts had been expecting non-GAAP earnings of $0.38 on adjusted sales of $1.21 billion, according to Seeking Alpha.

Symantec's stock jumped $1.23 (5.85 percent) to $22.25 in after-hours trading. Earnings were announced after the market closed Thursday.