Symantec internal investigation sends share price plummeting

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Symantec internal investigation sends share price plummeting

Symantec said on Thursday that it was investigating concerns raised by a former employee and the cyber security company forecast full-year results below analysts' estimates, sending its shares down nearly 20 percent in extended trading.

The company said its financial results and forecast may change based on the outcome of the internal investigation, which is being led by an audit committee of Symantec's board.

Shares of the company, which makes Norton Antivirus, were trading at US$23.42 after the bell.

The company said the investigation was not related to a security concern or breach in its products or systems. It did not provide any further details.

The committee has retained independent counsel and other advisers to assist in the investigation, Symantec said.

The investigation, in its early stages, is unlikely to be completed to file the annual report in time, according to the company.

Symantec has contacted the Securities and Exchange Commission and plans to provide additional information to the SEC as the investigation proceeds.

In November, Lifshitz & Miller LLP launched an investigation into the company's board for possible violations of federal securities laws in connection with its executive compensation awards.

"To the best of our knowledge, these investigations are not related," a source familiar with the matter told Reuters.

On its post-earnings call Symantec cancelled its customary question and answer session with analysts.

"It is likely a combination of the investigation and weaker-than-expected forecast that drove shares down," Morningstar analyst William Fitzsimmons said.

The company forecast full-year revenue between US$4.76 billion and US$4.90 billion, missing analysts' average estimate of US$4.93 billion, according to Thomson Reuters I/B/E/S.

Symantec's full-year profit outlook of between US$1.50 and US$1.65 per share also came in below estimates of US$1.80.

Revenue from the company's enterprise security unit, which accounts for most of its sales, fell 7.2 percent.

"On the enterprise security segment side it is highly competitive and there are concerns whether Symantec will be able to accelerate its business there, Raymond James analyst Michael Turits said.

The company's net loss narrowed to US$35 million, or 6 cents per share, in the fourth quarter, from US$143 million, or 23 cents per share, a year earlier.

Excluding items Symantec earned 46 cents per share. Revenue rose 10 percent to US$1.22 billion.

Analysts were expecting the company to report a profit of 39 cents per share on revenue of US$1.19 billion.

 

(Reporting by Laharee Chatterjee in Bengaluru; Editing by Shounak Dasgupta)

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