By Wallace Witkowski, MarketWatch
Symantec Corp. reported better-than-expected earnings for its fiscal first quarter Thursday just minutes after Broadcom Inc. officially announced it was acquiring the company’s enterprise security business.
Symantec shares were up 3% after hours, following a brief halt in trading, following a 12% rally in the regular session to close at $22.92 on reports Broadcom /zigman2/quotes/200646538/composite AVGO +1.94% was close to a deal for the company’s enterprise business. Broadcom shares were up 1.1% after hours, following a 0.3% gain to close at $270.98.
Broadcom said it will buy Symantec’s enterprise business for $10.7 billion in cash from “new committed debt financing” in a deal expected to close in Broadcom’s fiscal first quarter, which begins in November. Broadcom reaffirmed its full-year revenue outlook of $22.5 billion, with $17.5 billion from chip sales and $5 billion from software. Analysts surveyed by FactSet expect $22.65 billion.
“M&A has played a central role in Broadcom’s growth strategy and this transaction represents the next logical step in our strategy following our acquisitions of Brocade and CA Technologies,” said Hock Tan, Broadcom president and chief executive, in a statement.
Minutes later, Symantec reported first-quarter net income of $26 million, or 4 cents a share, compared with a loss of $60 million, or 10 cents a share, in the year-ago period. Adjusted earnings were 43 cents a share.
Revenue rose to $1.25 billion from $1.16 billion in the year-ago quarter.
Analysts surveyed by FactSet had forecast earnings of 33 cents on revenue of $1.19 billion.
Symantec said it expects adjusted second-quarter earnings of 40 cents to 44 cents a share on revenue of $1.16 billion to $1.21 billion, while analysts had forecast earnings of 42 cents a share on revenue of $1.19 billion.
Also, Symantec said it was reducing its workforce by 7%.