McAfee - Resultaten Q4 2005
McAfee rallies as results quell fears
LOS ANGELES (MarketWatch) -- McAfee Inc.'s stock rallied just over 18% on Friday as investors breathed a collective sigh of relief after the antivirus software firm's financial results proved less dire than many had feared following an earlier profit warning.
Late Thursday, Santa Clara, Calif.-based McAfee said fourth-quarterly profit increased 2.3% to outpace its recently lowered expectations, on increased revenue via more subscribers to its online consumer services.
Concerns and worst-case scenarios had run rampant among company watchers after McAfee late last month slashed expectations but provided no detail on the reasons behind the shortfall. By the end of Thursday's session, the stock had fallen 25% over the prior 30 days. See archived story on the profit warning.
In the latest session, however, shares rallied $4.02 to close at $25.90 - their best level for the day -- after the results revealed that the way in which some revenue was booked had hampered McAfee's quarterly performance.
"While there were many draconian scenarios being talked about on the Street, it simply came down to deal flow being ratably recognized over the course of time, rather than in the fourth quarter," said analyst Daniel Ives at Friedman Billings Ramsey & Co.
Ives encouraged investors to take another look at McAfee's stock, telling clients in a note that "the weakness over the last weeks is unwarranted given the company's strong product cycle, revenue visibility and compelling valuation."
The analyst rates shares of the Santa Clara, Calif.-based company as outperform with a target price of $35. See analyst coverage.
Profit, revenue nudge higher
McAfee's fourth-quarter profit rose to $39.7 million from $38.7 million a year earlier. The company's per-share profit came in unchanged at 23 cents on more average shares outstanding.
Revenue for the three-month period ended Dec. 31 moved higher by 3.7% to $253.3 million from $244.2 million in the comparable 2004 period.
McAfee said its consumer retail business posted a 15% slump in revenue compared to a year earlier, while its overall consumer-business revenue climbed 26%. The company's online consumer services revenue surged 46% and it added 2.2 million net new subscribers during the December quarter.
Deferred revenue increased by $89.5 million in the latest quarter to end the year at $746.4 million, the company said.
With one-time items stipped out, McAfee said its profit would have been $45.4 million, or 27 cents a share for the quarter, up from $37.1 million, or 22 cents a share, on the same basis a year ago.
Wall Street analysts, on average, had expected the McAfee to post a profit of 28 cents a share on revenue of $255.2 million, according to a Thomson First Call survey.
The company issued a financial outlook for the first quarter and 2006 as a whole that encompassed the current average of estimates, with the high end of its projected range ahead of current estimates.
McAfee forecast a first-quarter profit of 28 cents to 32 cents a share before items on revenue ranging between $250 million and $280 million. For the year, the firm predicted a profit before items of $1.25 to $1.35 a share on revenue of $1.05 billion to $1.15 billion.
The average of estimates called for McAfee to earn 30 cents a share on revenue of $260.2 million for the first quarter, Estimates for the year put the company's profit at $1.34 a share on revenue of $1.12 billion, on average.
Late last month, McAfee slashed expectations for the quarterly results, predicting a net profit for the just-reported period ranging from 16 cents to 20 cents a share on revenue of around $254 million.
Excluding items like restructuring charges and stock-based compensation, McAfee at the time had forecast earnings of 25 cents to 27 cents a share for the fourth quarter.
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McAfee Catches a Bid
McAfee's (MFE:NYSE) stock soared on Friday, after the company posted fourth-quarter earnings that were less than grim than feared, prompting several analysts to tout the company's potential.
Shares of the antivirus and security software firm leapt up by $2.92, or 13.35%, in recent trading to $24.80.
Deutsche Bank analyst Todd Raker upgraded the stock from hold to buy with a target price of $30, believing that the risk of Microsoft's (MSFT:Nasdaq) entry into the market and "uncertain corporate execution" is more than reflected in the current stock price.
He wrote that the company has momentum with Time Warner's (TWX:NYSE) AOL and Comcast (CMCSA:Nasdaq) , will be the default and recommended security provider for Dell (DELL:Nasdaq) computers, and he believes the company is picking up market share within the enterprise market.
"McAfee's stock has sold off 21% since its January 23rd preannouncement, primarily due to investors' concerns of deal contract length artificially boosting bookings and potentially more widespread revenue recognition issues," Raker wrote. "The miss was primarily due to a lower realization rate from fewer perpetual plus renewals, an increase in bundled deals with Foundstone, and larger contracts with some small increase in contract lengths. Management may have made poor assumptions in its 4Q05 guidance, but these issues are not a result of a weakening in the underlying fundamentals of the enterprise business."
Credit Suisse analyst Philip Winslow said in a research note on Friday that the stock was "too cheap to ignore" and maintained his outperform rating.
"We do not believe that McAfee is a broken company, which the market is implying at current levels," Winslow wrote. "While McAfee slightly mis-executed and experienced an accounting impact, we reiterate our outperform rating, based on 1) expected disruption in two of its primary competitors, 2) traction in its ISP and OEM agreements, and 3) operating leverage in its model, and maintain our $37.50 target price."
Several weeks ago, the company had warned that it would miss earnings targets, sending the stock tumbling.
JP Morgan analyst Sterling Auty was more cautious, maintaining his neutral rating of the stock.
"The risk we see in enterprise on slowing bookings, gross margin contraction, and the entrance of Microsoft in consumer market keeps us at a neutral," Auty wrote in a research note on Thursday.
Each of the investment companies cited has a financial relationship with McAfee.
LOS ANGELES (MarketWatch) -- McAfee Inc.'s stock rallied just over 18% on Friday as investors breathed a collective sigh of relief after the antivirus software firm's financial results proved less dire than many had feared following an earlier profit warning.
Late Thursday, Santa Clara, Calif.-based McAfee said fourth-quarterly profit increased 2.3% to outpace its recently lowered expectations, on increased revenue via more subscribers to its online consumer services.
Concerns and worst-case scenarios had run rampant among company watchers after McAfee late last month slashed expectations but provided no detail on the reasons behind the shortfall. By the end of Thursday's session, the stock had fallen 25% over the prior 30 days. See archived story on the profit warning.
In the latest session, however, shares rallied $4.02 to close at $25.90 - their best level for the day -- after the results revealed that the way in which some revenue was booked had hampered McAfee's quarterly performance.
"While there were many draconian scenarios being talked about on the Street, it simply came down to deal flow being ratably recognized over the course of time, rather than in the fourth quarter," said analyst Daniel Ives at Friedman Billings Ramsey & Co.
Ives encouraged investors to take another look at McAfee's stock, telling clients in a note that "the weakness over the last weeks is unwarranted given the company's strong product cycle, revenue visibility and compelling valuation."
The analyst rates shares of the Santa Clara, Calif.-based company as outperform with a target price of $35. See analyst coverage.
Profit, revenue nudge higher
McAfee's fourth-quarter profit rose to $39.7 million from $38.7 million a year earlier. The company's per-share profit came in unchanged at 23 cents on more average shares outstanding.
Revenue for the three-month period ended Dec. 31 moved higher by 3.7% to $253.3 million from $244.2 million in the comparable 2004 period.
McAfee said its consumer retail business posted a 15% slump in revenue compared to a year earlier, while its overall consumer-business revenue climbed 26%. The company's online consumer services revenue surged 46% and it added 2.2 million net new subscribers during the December quarter.
Deferred revenue increased by $89.5 million in the latest quarter to end the year at $746.4 million, the company said.
With one-time items stipped out, McAfee said its profit would have been $45.4 million, or 27 cents a share for the quarter, up from $37.1 million, or 22 cents a share, on the same basis a year ago.
Wall Street analysts, on average, had expected the McAfee to post a profit of 28 cents a share on revenue of $255.2 million, according to a Thomson First Call survey.
The company issued a financial outlook for the first quarter and 2006 as a whole that encompassed the current average of estimates, with the high end of its projected range ahead of current estimates.
McAfee forecast a first-quarter profit of 28 cents to 32 cents a share before items on revenue ranging between $250 million and $280 million. For the year, the firm predicted a profit before items of $1.25 to $1.35 a share on revenue of $1.05 billion to $1.15 billion.
The average of estimates called for McAfee to earn 30 cents a share on revenue of $260.2 million for the first quarter, Estimates for the year put the company's profit at $1.34 a share on revenue of $1.12 billion, on average.
Late last month, McAfee slashed expectations for the quarterly results, predicting a net profit for the just-reported period ranging from 16 cents to 20 cents a share on revenue of around $254 million.
Excluding items like restructuring charges and stock-based compensation, McAfee at the time had forecast earnings of 25 cents to 27 cents a share for the fourth quarter.
---------------
McAfee Catches a Bid
McAfee's (MFE:NYSE) stock soared on Friday, after the company posted fourth-quarter earnings that were less than grim than feared, prompting several analysts to tout the company's potential.
Shares of the antivirus and security software firm leapt up by $2.92, or 13.35%, in recent trading to $24.80.
Deutsche Bank analyst Todd Raker upgraded the stock from hold to buy with a target price of $30, believing that the risk of Microsoft's (MSFT:Nasdaq) entry into the market and "uncertain corporate execution" is more than reflected in the current stock price.
He wrote that the company has momentum with Time Warner's (TWX:NYSE) AOL and Comcast (CMCSA:Nasdaq) , will be the default and recommended security provider for Dell (DELL:Nasdaq) computers, and he believes the company is picking up market share within the enterprise market.
"McAfee's stock has sold off 21% since its January 23rd preannouncement, primarily due to investors' concerns of deal contract length artificially boosting bookings and potentially more widespread revenue recognition issues," Raker wrote. "The miss was primarily due to a lower realization rate from fewer perpetual plus renewals, an increase in bundled deals with Foundstone, and larger contracts with some small increase in contract lengths. Management may have made poor assumptions in its 4Q05 guidance, but these issues are not a result of a weakening in the underlying fundamentals of the enterprise business."
Credit Suisse analyst Philip Winslow said in a research note on Friday that the stock was "too cheap to ignore" and maintained his outperform rating.
"We do not believe that McAfee is a broken company, which the market is implying at current levels," Winslow wrote. "While McAfee slightly mis-executed and experienced an accounting impact, we reiterate our outperform rating, based on 1) expected disruption in two of its primary competitors, 2) traction in its ISP and OEM agreements, and 3) operating leverage in its model, and maintain our $37.50 target price."
Several weeks ago, the company had warned that it would miss earnings targets, sending the stock tumbling.
JP Morgan analyst Sterling Auty was more cautious, maintaining his neutral rating of the stock.
"The risk we see in enterprise on slowing bookings, gross margin contraction, and the entrance of Microsoft in consumer market keeps us at a neutral," Auty wrote in a research note on Thursday.
Each of the investment companies cited has a financial relationship with McAfee.
posted at 1:27 p.m.
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