Symantec shares plunge 33 percent on news of internal investigation over undisclosed issue
Former company employee sparks concerns, probe
Security software leader Symantec sunk like a stone Friday, as the company’s shares plunged more than 33 percent after the company disclosed its audit committee is running an internal investigation based on concerns raised by a former company employee.
Symantec divulged few details about the investigation, aside from that the issue
“does not relate to any security concern or breach with respect to our products or systems.” Symantec also
said it has notified the U.S. Securities and Exchange Commission about the internal investigation and it will let the SEC know of any new details it uncovers during its investigation.
On a conference call Thursday, Symantec officials didn’t take any questions from Wall Street analysts, and kept their comments only to a set of prepared remarks about its investigation and fiscal fourth-quarter results.
“The circumstances here are unusual, concerning, and we therefore believe investors should be mindful of downside scenarios,” said Credit Suisse analyst Brad Zelnick, in a research note about Symantec’s investigation and quarterly results.
As trading progressed Friday, Symantec’s shares had fallen to $19.50 after closing Thursday at $29.18.
In addition to making
the internal investigation public, Symantec said it expects revenue for its fiscal first quarter to be between $1.135 billion and $1.165 billion, the midpoint of which would be flat with Symantec’s sales in the same period a year ago.
The investigation and
disappointing forecast wiped out any enthusiasm Symantec might have hoped to see from investors about its fourth-quarter results. Symantec reported a profit of 46 cents a share, excluding one-time items, on revenue of $1.22 billion, compared to a profit of 28 cents a share, on sales $1.12 billion during the same period a year ago. Wall Street analysts had forecast Symantec to earn 39 cents a share on sales of $1.19 billion.