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Symantec tanks on word of internal investigation, disappointing fiscal 2019 outlook

Provider of Norton and LifeLock security products said 'concerns raised by a former employee' triggered the probe
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Symantec's annual report for fiscal 2018 likely will be delayed because of the investigation

Symatec Corp. (NASDAQ:SYMC) tanked on the revelation of an internal investigation that likely will delay the filing of the company's annual report and on a disappointing full-year forecast for fiscal 2019.

Shares of Symantec were down around 35% in late-morning trading, at US$19 a share, on the news.

Symantec did not offer specifics on the reason for the internal investigation, which the company said was triggered by "concerns raised by a former employee." However, Symantec did say it voluntarily contacted the U.S. Securities and Exchange Commission about the investigation and that its audit committee "intends to provide additional information to the SEC as the investigation proceeds."

The provider of Norton Antivirus software and LifeLock security service said it could not predict the duration of the investigation, but that its "financial results and guidance may be subject to change" based on its outcome. Symantec said it is unlikely the investigation will be completed in time for the company to file its annual report for the fiscal year ended 30 March 2018 "in a timely manner."

The disclosure of the internal investigation came as Symantec reported its results for the fiscal fourth quarter that ended 30 March 2018. Those results were ahead of analyst expectations.

Symantec said its net loss for the period shrunk to US$35mln, or US$0.06 a share, from US$143mln, or US$0.23 a share, in the year-earlier fourth quarter. On a non-GAAP basis, Symantec reported net income of $US310mln, or US$0.46 a share, up 68% from US$184mln, or US$0.28 a share, in the year-earlier quarter. Yahoo Finance put the average earnings estimate of 27 analysts at US$0.39 a share.

Revenue at Symantec rose 9%, to US$1.23bn from US$1.12bn. Yahoo Finance put the average revenue estimate of 25 analysts at US$1.19bn.

However, Symantec's outlook for fiscal 2019 results fell short of analyst expectations.

The Mountain View, California-based company expects revenue for fiscal 2019 in the range of US$4.76bn to US$4.90bn and earnings per share in the range of US$1.50 to US$1.65. According to Yahoo Finance, the average revenue estimate of 28 analysts for fiscal 2019 is US$4.93bn and the average earnings estimate of 29 analysts is US$1.81 a share.

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