Symantec Discloses Investigation, Sending Shares Plunging 35%
(Bloomberg) -- Symantec Corp. plummeted 35 percent after the No. 1 maker of cybersecurity software disclosed an internal investigation into an unspecified matter and delayed the filing of its annual report.
The inquiry creates a “meaningful amount of uncertainty,” Keybanc analyst Rob Owens said in a note to clients. He has a sector-weight rating on the shares, which tumbled Friday by the most since June 2001 to as low as $18.85.
The board’s audit committee is investigating “concerns raised by a former employee,” and the company’s financial results and guidance could change as a result. Symantec said it had alerted the U.S. Securities and Exchange Commission.
The company also gave a disappointing earnings forecast. Fiscal first-quarter profit will be 31 cents to 35 cents per share, compared with an estimate of 41 cents, according to data compiled by Bloomberg. Revenue will be $1.14 billion to $1.17 billion, Mountain View, California-based Symantec said Thursday in a statement. Analysts projected $1.19 billion.
While Gartner Inc. predicts worldwide cybersecurity spending will rise 8 percent to $97 billion this year, Symantec is struggling with a decreasing number of people buying antivirus software for PCs, which historically has been a strong market. The company has sought to offset those declines with deals such as the $4.65 billion acquisition of Blue Coat Systems, which has lifted demand from corporations, and targeting affluent consumers concerned about identity theft with the $2.3 billion acquisition of LifeLock.
Adjusted earnings were 46 cents per share in the fiscal fourth quarter, topping the analyst average estimate of 39 cents. Revenue rose 9.6 percent to $1.22 billion, ahead of the estimate of $1.19 billion.
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