McAfee boosts Network Associates Q3 profit

Boosted by the performance of recently acquired McAfee.com Corp. and a deal with the U.S. Department of Defense (DOD), Network security company Network Associates Inc. Thursday reported a third quarter profit of US$9.1 million, or $0.06 per share.

The gain in the third quarter, ending Sept. 30, 2002, compared to a loss of $11.3 million, or $0.11 per share, in the third quarter last year. Network Associates reported consolidated net revenue of $232.2 million for the quarter. Excluding McAfee.com, net revenue for the third quarter was $211.2 million, meeting the company's own estimate of between $205 million and $215 million, according to a statement released by the company. Net revenue for the third quarter of 2001, including McAfee.com, was $205.6 million.

Included in third quarter results were $13.6 million in deal-related costs stemming from the purchase of McAfee and Traxess Inc., a maker of forensic technology, and $11.2 million in stock-based compensation charges produced by the McAfee.com acquisition, according to the statement.

Contributing to the company's performance in the third quarter was the performance of McAfee.com, which offers online services relating to computer virus prevention, detection, and removal.

In March, Network Associates announced its intention to buy back the 25 percent of the company it didn't own in a stock swap totalling approximately $202 million. In August, McAfee's board accepted Network Associates' offer.

McAfee.com is now wholly owned by Network Associates and has been folded into its McAfee consumer group, which includes the McAfee consumer antivirus software and McAfee.com online services.

Also helping the company's bottom line was finalization of a five year contract with the DOD's Defense Information Systems Agency (DISA). Under the terms of the deal, which is the largest in Network Associates' history, McAfee antivirus software and computer security technology will be rolled out to more than 3 million government workers, according to the statement.

Network Associates is predicting fourth quarter net revenue of between $252 million and $257 million and pro forma net earnings between $0.24 and $0.26 per share.

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