Symantec Q3 2008 Earnings Conference Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Adam Holt - JPMorgan - Analyst : Good afternoon and thanks for taking my question. First question is on the strengthened deferred revenue, which was the best number we've obviously seen in a number of quarters. You mentioned the impact of currency on deferred revenue but I also was hoping to find whether or not you saw any material shift in how contracts were getting booked in the quarter towards a bigger component of deferred revenue, if there was anything else behind the strength in that line item?

Question: Adam Holt - JPMorgan - Analyst : And if I could just shift for one question on the cost side, you mentioned that you did have a couple of cost savings initiatives, margins were up on a year and year basis. Could you detail a little bit some of the areas where you were pulling in expenses and maybe particularly talk about some of the special incentives to the sales organization and the impact those had?

Question: Adam Holt - JPMorgan - Analyst : Thank you.

Question: Peter Kuper - Morgan Stanley - Analyst : Great, thanks very much. I'm not sure if this is John or Enrique, but guys last summer we heard a lot about deal losses, some pretty large names and McAfee was certainly making good noise, they were picking up a lot of competitive wins. John, I think specifically you said this quarter, you had some competitive displacements. Are you seeing the competitive environment now shift back in your favor from a stability point of view and is that because of 11.0 coming out or being more aggressive on price or a little more color there would be very helpful, please.

Question: Peter Kuper - Morgan Stanley - Analyst : Got it. And then, as part in line with that thinking now, I think again you're offering a more comprehensive suite at the endpoint, in your comments John you said, I think you said you would be selectively acquisitive, if I heard that right, given you guys have run the gamut from smaller deals like a Sygate to medium sized deals to Vantu up to an Altiris size, are there any deal size considerations at this point, or just going to be selective where it makes sense as a general rule?

Question: Peter Kuper - Morgan Stanley - Analyst : Great. Thanks very much John. Congrats.

Question: Heather Bellini - UBS - Analyst : Hi, John, good afternoon. Excuse me. I had a question, last quarter you were pretty insightful, you commented about the slowing of the U.S. economy and gave what ended up being maybe guidance that was a little bit too cautious. I saw your comments on January 9 that you put out on Reuters, and I guess I'm just wondering, what do you think's different that gives you the confidence given your comments about now you see it spreading to maybe economies outside the U.S. to raise numbers whereas you didn't have it last quarter? I guess that's one question. And then I have a follow-up about the endpoint compliance product.

Question: Heather Bellini - UBS - Analyst : Okay. And then a follow-up on the endpoint compliance product, you shipped 23 million units. Can you talk about the percentage of those 23 million units where people are actually turning it on for the first time so there's a revenue opportunity for you versus a maintenance opportunity?

Question: Heather Bellini - UBS - Analyst : Okay, great. Thank you.

Question: Derek Bingham - Goldman Sachs - Analyst : Hi, this is Derek Bingham for Sarah. Congratulations on the quarter. I wanted to get some detail on the realignment of back into what seems like storage and security divisions, and interested in what drove that decision?

Question: Derek Bingham - Goldman Sachs - Analyst : Is there going to be any change from that in terms of how the channel is covered or served? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies.

Question: Derek Bingham - Goldman Sachs - Analyst : Okay. And then just one follow-up, on the APM divestiture, is that likely to be the largest that we're likely to see in terms of assets that you're looking to shed?

Question: Derek Bingham - Goldman Sachs - Analyst : Great, thank you very much.

Question: Phil Winslow - Credit Suisse - Analyst : Hi guys. Just, John, you mentioned continued strength on that Backup Exec product line following a year after the launch now, I was wondering if you could comment on your outlook there, but also on that NetBackup business and how do you view the growth rate of the overall backup market and particularly between those two segments?

Question: Phil Winslow - Credit Suisse - Analyst : Great. Thanks guys. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies.

Question: Todd Raker - Deutsche Bank - Analyst : Hi guys, nice quarter.

Question: Todd Raker - Deutsche Bank - Analyst : Just turning to the consumer market for a moment. I know you guys gave some commentary in terms of Norton 360 and the record uptake you've seen, but could you just step back and give us a sense for where you think the growth profile of this industry is today, if we look out two or three years, where you see the opportunity around penetration, international versus domestic, and what the upsell opportunity to suites, how far down that path are we and what's the uptake expectations going forward?

Question: Todd Raker - Deutsche Bank - Analyst : Two quick follow-ups on that. How much of the business would you attribute to international today versus domestic? And do you guys feel you're growing faster than the market in line, or below?

Question: Todd Raker - Deutsche Bank - Analyst : I'm sorry, I'm talking specific to consumer.

Question: Todd Raker - Deutsche Bank - Analyst : Okay. That's good.

Question: Todd Raker - Deutsche Bank - Analyst : Great. Thanks guys.

Question: Miranda Davidson - Raymond James - Analyst : Hi, this is Miranda Davidson calling for Michael Turits. Can you give us any more details on the turn around of the sales organization in North America? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies.

Question: Miranda Davidson - Raymond James - Analyst : Well, thank you.

Question: Tim Klasell - Thomas Weisel Partners - Analyst : A quick question with the Backup Exec 12 launch, clearly you've had a great run with 11, do you expect any freezeups or can you walk us through what you'd expect about the growth of that product as you get closer to the launch?

Question: Tim Klasell - Thomas Weisel Partners - Analyst : Okay, good. Then one real quick one. I know with one of the objectives with 360 was to have people backing up online, it would be a stickier sale. Can you give us any idea of what percentage of the Norton 360 customers are actually using the backup feature?

Question: Tim Klasell - Thomas Weisel Partners - Analyst : Okay. Great. Thank you. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies.

Question: Daniel Ives - FBR - Analyst : Thanks. A question with the current environment, let's call it uncertain, do you believe that Symantec can capitalize on that just given the reputation, just the breadth of your products, maybe some customers that would normally go to smaller vendors now would go to Symantec, do you notice an opportunity as we look at the next few quarters?

Question: Daniel Ives - FBR - Analyst : Okay. Thanks. Great quarter.

Question: Katherine Egbert - Jeffries & Company - Analyst : Hi, good afternoon. I have a couple of questions. Enrique first, your sales quotas for the specialists, are they all new licenses or is it a simple majority of new license of the quote itself?

Question: Katherine Egbert - Jeffries & Company - Analyst : Solely new licenses? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies.

Question: Katherine Egbert - Jeffries & Company - Analyst : Okay, great. Then also you mentioned the word divestiture and I apologize if someone else asked this earlier, to what extent are you going to divest businesses, will you do kind of what VeriSign's doing, communicate in advance that there's bumbles for sale, will you put anything into discontinued ops, can you give us some sense?

Question: Katherine Egbert - Jeffries & Company - Analyst : Okay, fair enough. Thanks.

Question: Brian Freed - Morgan Keegan - Analyst : Hi guys. Thanks for taking my call. Could you talk a little bit about your emerging product segments, things like tier disk, deduplication and the DLP products, with the Vontu, what you see as a market tone and timing for those types of solutions?

Question: Brian Freed - Morgan Keegan - Analyst : Great. Thanks.