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M&A Worries Stall Symantec Shares

Shares of security vendor Symantec Corp. (Nasdaq: SYMC) dropped $2.01 (8.45 percent) to $21.78 in early afternoon trading today as investors showed their uneasiness with the integration and performance of the company's newly acquired Veritas business.

Last night, Symantec reported a first-quarter GAAP profit of $199 million, or 27 cents a share, on revenues of $700 million. While the company's revenues were up 26 percent on the same period last year, the result was slightly below analysts' expectations of $712 million (see Symantec Reports Q1).

Symantec, which completed its $13.5 billion acquisition of Veritas Software Corp. (Nasdaq: VRTS) earlier this month, reported a $117 million profit, or 16 cents a share, in the first quarter of 2004.

The firm's pro forma numbers were the same as its GAAP earnings; it reported a pro forma profit of $199 million or 27 cents a share. This number beat analysts' expectations by 2 cents a share and compared favorably to the company's year-ago quarterly earnings of $128 million, or 18 cents a share.

Because the Veritas deal was only completed a few weeks ago, the first-quarter results did not include the storage specialists financials (see Symantec, Veritas Complete Merger and Shareholders OK Veritas/Symantec Merger). However, Gary L. Bloom , the former Veritas CEO, said growth in licensing and services revenues helped drive Veritas’s overall revenues to $529 million for company’s quarter ending in June, up 9 percent on the same period last year.

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