Weak sales in its enterprise storage group have forced Symantec to warn of lower-than-expected financial results for its most recent quarter.
Symantec had been expecting to post earnings of US$0.14 or US$0.15 per share for its third fiscal quarter, ended Dec. 29, but on Tuesday it warned that they would be in the US$0.10 to US$0.11 range instead. Revenue for the quarter is expected to be in the US$1.29 billion to US$1.31 billion range, down from previous estimates of between US$1.32 billion to US$1.35 billion.
In a statement, Symantec Chief Executive Officer John Thompson blamed the shortfall on weak performance in the company's Data Center Management business, which primarily sells the Veritas enterprise storage products that Symantec acquired in 2005.
The Data Center Management group is run by Kris Hagerman, who was previously executive vice president of storage and server management at Veritas.
Implementation of a new ERP (new enterprise resource planning) system during the quarter cost more than expected, which also hit the company's bottom line, Thompson said.
The California software vendor is not the only technology company to have struggled during the last three months of 2006. Last week SAP and Advanced Micro Devices warned of similarly disappointing results for the period.
Symantec also lowered its estimates for its fiscal year ending March 2007, saying that it expected revenue to be in the range of US$5.08 billion to US$5.11 billion. This is down from its previous estimate of US$5.1 billion to US$5.3 billion.
Symantec's stock took a beating on the warning, dropping nearly 13 percent by Tuesday afternoon. Just after 2 p.m. Eastern, it was trading at US$17.82, down from its previous close of US$20.48.
Symantec will report its Q3 earnings on Jan. 24.