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Norton 360 boosts Symantec's Q2

But earnings show lacklustre enterprise growth

Two years after its acquisition of enterprise software vendor Veritas, Symantec's consumer division remains the company's fastest-growing product line.

Consumer business grew by about 10 percent year-on-year and represents about 30 percent of Symantec's overall business, the company said as it announced financial results for its second quarter of fiscal 2008, ended 28 September.

Click here to download a free trial of Symantec Norton 360 v3.0

Excluding an $87m write-down of assets, revenue was $1.44bn for the quarter, up 13 percent from the year-ago period. Quarterly earnings were $0.29 per share. Analysts had been expecting earnings of $0.26 per share on $1.39bn in revenue, according to estimates compiled by Thomson Financial.

During a conference call with analysts, Symantec Chairman and CEO John Thompson said the company's North American business had missed expectations and he offered cautious guidance for the next three months. "Our North America operating business experienced weak new business," he said. "This, coupled with the uncertain economic environment, caused us to take a more conservative view of the December quarter."

"New licence sales for a number of the data centre management products was a little bit weaker than our forecast," he added.

Symantec now expects revenue for the next quarter to fall in the range of $1.43bn to $1.47bn, with earnings per share between $0.25 and $0.30. Analysts' consensus had been $1.47bn, with earnings of $0.31, according to Thomson Financial.

Symantec's consumer business got a boost from the introduction of the much-anticipated Norton 360 software, released in late February.

Consumer revenue totalled $434m for the quarter, 61 percent of this coming from the company's flagship Norton Internet Security suite. According to Thompson, 72 percent of consumer purchases are online now, as opposed to shrink-wrapped products.

The company's Windows-based backup products, which include Backup Exec, also posted strong results the company said.

On the enterprise side, the company's security and data centre management products, including the Veritas software, grew by seven percent. These products now account for 58 percent of the company's revenue.

Symantec's much smaller services business - totalling six percent of revenue - grew by 30 percent.


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