More bad financial news at Symantec as CEO ‘steps down’

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Fourth CEO goes in under five years as the cloud hits the value of Symantec’s offering

Symantec has issued a sales warning and its CEO is now “stepping down”. The security software firm last night updated its fiscal fourth quarter guidance, ended 1 April.

Symantec will release actual results for the fiscal fourth quarter after the market closes on 12 May. Revenue is now expected to be $873 million compared to previous guidance of $885 to $915 million. The news follows a poor third quarter too.

SecurityIt said: “A shift in enterprise security customer buying preferences is resulting in less license revenue during the quarter and more revenue being deferred to future periods. This included a faster than expected shift within our product mix to subscription and rateable contract structures.”

The explanation demonstrates a customer dash to cloud-based and often cheaper on-demand security solutions.

The company also expects fourth quarter non-GAAP operating margins and EPS of 25 percent and $0.22, below its previous guidance of 26 to 28 percent and $0.24-$0.27. “The shortfall is primarily a result of lower than expected revenue, partially offset by a favourable impact from our cost efficiency initiatives which have already begun across eight different work streams,” said Symantec.

Outgoing CEO Michael Brown said: “The shift to more rateable revenue is consistent with our unified security strategy, as more customers are buying security offerings that require continuous protection and monitoring to remain up-to-date and protected against the latest threats.”

The company’s Financial Analyst Day, which was scheduled for 26 May to enable greater scrutiny, has also been postponed and will be “rescheduled at a later date”.

Brown will continue to serve as CEO and as a director of the company until a successor has been appointed. Brown is the fourth Symantec CEO to be replaced in less than five years.

Symantec recently sold off its Veritas storage and data backup arm.

@AntonySavvas