Symantec Corporation (NASDAQ: SYMC) stock lost over 2.8% on 9th August, 2019 (as of 9:50 am GMT-4 ; Source: Google finance)
The company signed a definitive agreement to sell its Enterprise Security assets, which include the Symantec name, to Broadcom Inc. for $10.7 billion in cash. The transaction, which was approved by Symantec’s Board of Directors, is expected to close before the end of the calendar year after getting required regulatory approvals. Further, the sale of Enterprise Security assets delivers $10.7 billion before tax which is estimated to yield approximately $8.2 billion of after tax proceed, the Company expects to issue a special dividend of $12.00 per share for shareholders in the fourth quarter FY 20
They approved an increase of $1.1 billion to the remaining share repurchase authorization, while maintaining the current debt levels, therefore the total authorization is now $1.6 billion. The Company expects to increase the regular quarterly dividend to $0.125 per share after the close of the transaction, funded solely by Consumer Cyber Safety’s on-going business and with the potential to increase future dividends, after the transition period and once stranded costs are eliminated. The completion of this transaction will unlock the embedded value in Enterprise Security, while enabling Consumer Cyber Safety to emerge as a pure play market leader with strong earnings power.
SYMC in the second quarter of FY 19 has reported the adjusted earnings per share of 43 cents, while adjusted revenue growth was 9 percent to $1.25 billion in the second quarter of FY 19. For the quarter, SYMC has generated an operating profit margin of 30%, up 2 points year-over-year driven by revenue growth and disciplines cost management.
Moreover, in the Enterprise Security Segment the company has posted the revenue of $615 million, up 11% year-over-year in constant currency. Q1 Enterprise Security reported billings where $497 million, up 10% year-over-year. In the Consumer Cyber Safety segment we generated 7% increase in revenue to $636 million. In Q1 average revenue per user or ARPU increased to $8.83 per month, up 2% over year-over-year normalized for that extra week.
For the third quarter ending in October, Symantec expects its per-share earnings to range from 40 cents to 44 cents.
The company expects revenue to be in the range of $1.16 billion to $1.21 billion for the fiscal second quarter. Analysts surveyed by Zacks had expected revenue of $1.19 billion.