Server slump hurts security vendor Symantec

With revenue down slightly during its latest fiscal quarter, Symantec said Wednesday that it was starting to see some stabilisation in enterprise spending.

Symantec reported revenue of $1.48 billion (£900m) for its second fiscal quarter, which ended 2 October. That was ahead of the consensus analyst estimate recorded by Thomson Reuters, but down 3 percent from the same quarter a year ago. Excluding charges, Symantec's earnings were also ahead of expectations at $294 million (£179m), or $0.36 per share, the company said.

Symantec's consumer business did well, and while its storage and server management division saw sales drop 9 percent year over year, IT spending is strengthening, said Symantec CEO Enrique Salem in an interview.

"We're definitely seeing the US market stabilise," he said. "We've seen China and parts of Asia continue to do well, and we're seeing some weakness in western Europe."

Salem's comment that IT spending appears to be stabilising echoes those made by other enterprise IT vendors such as IBM in recent weeks.

Server sales were down about 30 percent last quarter, according to data from research firms IDC and Gartner, and that decline has hit Symantec too, Salem said. "Server market deceleration continued to put pressure on the business, particularly in new licence sales on the Sun platform," he said.

Symantec's storage products are popular on Sun's Solaris OS, but customers have held off buying new equipment as Sun waits for its Oracle buyout to be approved by regulators.

Consumer revenue was up 6 percent year over year and Salem said he did not expect third quarter sales to be affected by Microsoft's free Security Essentials antivirus software, which became available earlier this month.

Symantec also said it would buy back $1 billion (£600m) in company stock. "We did authorize a $1 billion share repurchase and that's because we have a lot of confidence in our business model and our cash flow," Salem said.