Tomahawk, WI 11/13/2013 (BasicsMedia) – Restructuring at Symantec Corporation (NASDAQ:SYMC) was supposed to bolster the company’s net income and help it increase return on equity. However, it appears that SYMC shot itself on the foot by undertaking headcount restructuring. A look at the company’s performance in pre-restructuring period and post-restructuring period reveal significant revenue dip. This revenue dip can be seen spread across all its operational segments.

For its Q2.14 data reported Oct. 23, SYMC was expected to offset the weakness in its consumer security segment as revealed in Q1.14, with stronger enterprise security. However, not only did these security segments take a serious beating in the latest quarter, but other division such as User Productivity and Information Management suffered revenue dip as well.

Symantec Corporation (NASDAQ:SYMC)’s User Productivity & Protection segment accounts about 44% of its total revenue. In the most recent quarter, this segment which includes security products such as Norton Internet Security and Norton Antivirus recorded revenue dip. Revenue for the segment came in $719 million in Q2.14. In the same quarter a year ago, revenue was $743 million. Sequentially, the revenue declined $13 million, meaning that the Q1.14 revenue was $732 million.

Dwindling revenue

Moving on, despite SYMC’s Information Security showing strong growth in Q1.14, it waned in the last reported quarter. On year over year basis, the Q2.14 revenue in this segment came in at $316 million, dropping from $324 million in Q2.13. Also, on quarter to quarter basis, the revenue fell below the Q1.14 figure of $336 million by $20 million. The fall in revenue did not just end there. SYMC’s Information Management unit which accounts for 37% of total revenue also dropped heavily, coming at $602 million, against $632 million in the same quarter last year. Sequentially, the revenue dropped by $30 million. On upfront payment for products, under Deferred Revenues, the Q2 figures declined year over year as well as sequentially. Sequentially deferred revenue dropped by 17% to 3.5 billion from $3.8 billion.

So far SYMC management is only expecting revenue growth from F2015. There appears to be critical issues in play which would deny it the much needed revenue growth in the current fiscal year. Growing revenue seems to pile a lot of pressure on the management as investors press for high growth. Symantec Corporation (NASDAQ:SYMC) has been through a transformation phase in which its workforce has been restructured or jobs cut off. This was a critical step to help the company trim its operation cost and free more cash flow. But the damage that this has had on the company so far could not have been seen.

On the positive, however, the company was able to witness flat operating expenses in the just reported quarter, perhaps validating the assertion that the ambitious transformation process which the company undertook was not in vain.  The company has stated that it expects more reduction in operating expense in the coming quarter. Also, operating margin has shown recovery, moving to 15.1% in the most recent quarter from 13.1% in the previous quarter. Also, its net income came in strong on yearly basis, largely due to lower tax expenses.

Wait until 2015

So for investors looking for growth, the company states that it can only answer that call from either the first or the second quarter of F2015.

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