Symantec Surges on CEO Change, Strong Results

James Rogers

NEW YORK (TheStreet) -- Symantec(:SYMC) shares climbed more than 12% on Wednesday after the company announced a surprise CEO reshuffle and strong second-quarter results.

The security software maker announced that CEO Enrique Salem has stepped down after three years at the company's helm, to be replaced by board Chairman Steve Bennett.

"Enrique Salem has been a significant contributor during his 19 years associated with Symantec, including the last three years as CEO," said Bennett, in a statement. "While progress has been made over the last three years in many areas, it was the board's judgment that it was in the best interests of Symantec to make a change in the CEO."

In its statement, Symantec explained that the decision to make the leadership change was not based on any particular event or impropriety but was instead made after "ongoing consideration and a deliberative process."

The new CEO added that while Symantec's assets are strong the company is underperforming.

Bennett, the former CEO of Intuit(:INTU), joined Symantec's board in February 2010 and became chairman in 2011.

Symantec, which has wrestled with declining license sales, has seen its shares plunge more than 30% during the last 12 months.

"While the executive change was not expected, it is not completely surprising in light of the persistent challenges at Symantec," noted Todd Weller, an analyst at Stifel Nicolaus. "We believe the move will be viewed as a short-term positive, based on the potential for future change."

Symantec, which was initially scheduled to report its second-quarter results after market close, posted revenue of $1.67 billion and earnings of 43 cents a share, comfortably above analysts' forecast of $1.65 billion and 38 cents.

Revenue from the company's consumer business decreased 1% year over year, but increased 2% adjusted for currency, while its security and compliance division grew 7%, or 10% adjusted for the effects of currency. Symantec's storage and server management revenue decreased 2% from the prior year's quarter, but grew 1% adjusted for currency.

For the second quarter, Symantec said it expects revenue between $1.635 billion and $1.665 billion and earnings between 35 cents a share and 39 cents a share. Analysts are looking for sales of $1.69 billion and earnings of 40 cents a share.

--Written by James Rogers in New York.

Follow @jamesjrogers

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