Morgan Stanley Comments On Symantec Results

According to Morgan Stanley, Symantec SYMC posted double-digit organic cc billings growth for the first time in over 4-years by the calculations — coming in $275M ahead of cons. — but with an ~$0.06 impact from higher commissions failed to show any leverage from the top-line strength. Morgan Stanley said that there was little to pick at in terms of top-line performance; all product segments beat cons., deals over $300K were up 32% YoY, and bundled transactions yielded a record number of deals greater than $10M. “We believe SYMC is benefiting from better sales execution, a strong ramp in acquired products, a revamped backup product line and a distracted McAfee. Op. margins at 24.1%, well below cons. at 25.2%, were the most disappointing aspect of Q4. Mgmt's guide was relatively in-line when adjusting for a stronger FX tailwind, and given the strong 4Q billings is likely conservative — although June tends to be a tough Q for SYMC. At 11X CY12 EPS SYMC is not expensive, however we look for more comfort in the LT growth before getting more constructive on the stock.” Symantec closed yesterday at $19.41.