Symantec CEO to leave as earnings forecast falls

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Symantec CEO to leave as earnings forecast falls
Mike Brown

Expected fourth quarter results to miss estimates.

Symantec today revealed its chief executive officer Michael Brown will step down, as it published revised fourth quarter earnings predictions below analyst estimates.

Michael Brown will leave the company after less than two years in the role, the firm said. It did not detail the reasons for his departure.

Symantec's board of directors has begun searching for a new CEO, and Brown will stay on until a successor has been appointed.

It has created an "office of the president" to keep Symantec on its strategic path throughout the CEO search and transition.

The office consists of Ajei Gopal, who joins the company from Silver Lake Partners as chief operating officer, as well as Symantec CFO Thomas Seifert and general counsel Scott Taylor.

Symantec chairman Daniel Schulman thanked Brown for his service.

"Under his leadership, Symantec has successfully executed against the five priorities of its transformation, including divesting Veritas, developing a new product roadmap in enterprise security, improving our cost structure, strengthening our executive team, and continuing to return significant cash to shareholders," Schulman said in a statement.

"Given our solid financial foundation and clear path forward as the leader in cybersecurity, this is the right time to transition leadership for Symantec’s next chapter of growth."

Brown said he was "extremely proud" of what his team had accomplished.

The CEO departure comes as Symantec cut its quarterly guidance, sending its shares down 16.4 percent to US$15.12 (A$19.80) before the bell.

Symantec had initially estimated revenue of between US$885 million and US$915 million for the quarter ended April 1, but today revised that to US$873 million.

Analysts were expecting revenue of US$901.2 million, according to Thomson Reuters.

Symantec blamed the shortfall on a shift in the buying preferences of its enterprise security customers, which led to lower than expected license revenue during the quarter.

"This included a faster than expected shift within our product mix to subscription and ratable contract structures," Symantec said.

“The shift to more ratable revenue is consistent with our unified security strategy, as more customers are buying security offerings that require continuous protection and monitoring to remain up-to-date and protected against the latest threats," Brown said.

Enterprise security revenue is now expected to come in at US$467 million, compared to previous forecasts of US$480 million to US$500 million.

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