Revenue, Profits Soar At SymantecRevenue, Profits Soar At Symantec

Internet security software and hardware maker Symantec Corp. reported that its third-quarter revenue rose nearly 30%, with most of the gain driven by strong demand in the consumer and international markets.

"For the first time in the history of the company, international revenues surpassed domestic revenue," chairman and CEO John Thompson told a conference call late Wednesday.

For the third quarter, ended Dec. 31, 2002, Symantec reported a net profit of $72 million, compared with $100,000 for the same period last year, which was heavily affected by acquisition costs. Revenue for the quarter was $376 million, up from $290 million in the year-ago quarter.

Security analysts say Symantec is benefiting from increased spending on Internet security and that the company is focusing on the right things. "They're tying their products together to provide a way for chief security officers to be able to see what is happening on their systems and better understand and prioritize the threats they face," says Pete Lindstrom, research director for Spire Security.

Charles Kolodgy, Internet security analyst at IDC, agrees, and says that companies are investing heavily into better managing the software and network vulnerabilities their systems face. "Symantec saw 20% growth in that space, and that's what we're seeing in the overall market," he says.

Kolodgy says more small businesses and consumers are beginning to renew their antivirus software subscriptions to get regular upgrades that protect against new viruses and worms. "They used to let the free trials they got when they bought new systems expire," he says. "Now they're learning that it's cheaper to pay the $20 or $40 a year subscription than rebuild their hard drives when they get hit by a virus."

However, Symantec has been working hard to shake its image as a consumer antivirus company. This quarter, the company is trumpeting several large wins; it says it has landed 215 contracts each totaling more than $100,000; 59 contracts worth more than $300,000; and eight contracts surpassing $1 million. Says Kolodgy, "It's not consumers or small businesses signing those deals."