(Reuters) – Norton antivirus software maker Symantec Corp (SYMC.O) reported third-quarter revenue below analysts’ estimates, hurt by lower sales in its enterprise security division, and cut its profit and revenue forecasts for 2018.
The company’s shares fell about 3 percent in extended trading on Wednesday.
However, the company said enterprise revenue in the quarter and forecasts for the year took a hit because it failed to keep up with the pace at which customers transitioned to cloud.
The company underestimated the timing of customers’ shift to cloud and subscription-based services and that led to a recalculation of the outlook, Symantec Chief Executive Gregory Clark said on a post-earnings call with analysts.
Symantec cut its adjusted revenue forecast to between $4.92 billion and $4.95 billion for fiscal 2018 from its earlier estimate of between $5 billion and $5.10 billion.
Excluding items, it now expects earnings of $1.60 and $1.64 per share, compared with its previous expectation of $1.66 to $1.76 per share.
“After having a similar mix-shift issue last quarter, we would have expected management to have considered this factor when providing 2H guidance in early November,” Susquehanna Financial Group analyst Anne Meisner said.
Revenue in its enterprise security unit, its biggest by sales, fell about 3 percent to $625 million, missing analysts’ estimates of $684.46 million.
Net income rose to $1.34 billion, or $2.01 per share, in the third quarter ended Dec. 29 from $46 million, or 7 cents per share, a year earlier.
The big jump in net income reflected a gain of more than $600 million related to the sale of its website certification business in August 2017.
The company also received an $810 million provisional benefit from the U.S. tax reforms.
Excluding items, Symantec reported a profit of 49 cents per share and revenue of $1.21 billion.
Analysts on average had expected a profit of 44 cents and revenue of $1.27 billion, according to Thomson Reuters I/B/E/S.
Reporting by Arjun Panchadar and Shariq Khan in Bengaluru; Editing by Sai Sachin Ravikumar and Anil D’Silva