Symantec lowers earnings results after software glitch

It had incorrectly configured an internally developed accounting tool

Symantec Corp. lowered its reported revenue for the first quarter of fiscal 2005 by $20 million after discovering that it had incorrectly configured an internally developed accounting tool, the company announced yesterday.

The error, which involved software used to calculate deferred subscription revenue from Symantec's international retail business, was discovered on Aug. 3, John Thompson, Symantec's chairman and CEO, said in a conference call.

The bug caused Symantec to recognize revenue incorrectly over a period of two years, although it is adjusting its revenue only for the quarter in which the error was discovered, Thompson said. The error had no effect on Symantec's cash position, making the adjustment in keeping with generally accepted accounting practices, he said.

The $20 million will now be recognized as deferred revenue over the next year, Thompson said.

In July, Symantec reported first-quarter revenue of $577 million and net income of $131 million, or 37 cents per share. Those numbers will be revised to $557 million in revenue and net income of $117 million, or 33 cents per share, the company said.

Symantec's accounting tool had been configured to record international sales as if they were in U.S. dollars, Thompson said. A sale of 19.95 euros, for example, would have been counted as $19.95.

"Were it not for the divergence between the U.S. dollar and the euro, we probably would have never caught it," he said. "At the time we implemented the tool, the ratio between the European currency and the U.S. dollar was almost one to one."

Symantec intends to include the adjusted numbers in its 10-Q regulatory filing with the U.S. Securities and Exchange Commission today, Thompson said.


Copyright © 2004 IDG Communications, Inc.

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