Symantec to talk shop — and shopping

Contact: Brenon Daly

Although most of the attention in Symantec’s quarterly report Wednesday night will be focused on the top and bottom line, we expect the company’s recent shopping spree to also come up. The storage and security giant announced three acquisitions in its just-completed quarter – more deals than it did in all of 2009. The bill for Big Yellow’s almost unprecedented M&A activity in the quarter came in at $1.65bn. As we recently noted, Symantec on its own has accounted for one-third of the spending for all security deals so far this year.

The biggest part of Symantec’s spending will go toward covering its purchase of the identity and authentication business from VeriSign, its largest transaction in more than a half-decade. (As a reminder, VeriSign’s business was running at about $370m, generating a very healthy $100m or so in cash flow each year.) Big Yellow has yet to close that deal, which was announced in mid-May, or offer specific financial projections for that business. Look for more information on that acquisition on the call tonight.

Symantec will be reporting its fiscal first-quarter results, which covers the second calendar quarter, after the closing bell. Analysts are projecting earnings of about $0.35 per share on revenue just shy of $1.5bn. However, we would note that rivals in each part of Big Yellow’s two main businesses have come up short of Wall Street expectations in their recent quarters. Two weeks ago, storage vendor CommVault indicated that sales had softened while just this morning, security rival Websense offered a disappointing earnings outlook. Websense shares were down more than 10% in midday trading.