Symantec Announces Strong First Quarter Financial Results; Raises Fiscal Year 2004 Guidance.

Business Editors/High-Tech Writers

CUPERTINO, Calif.--(BUSINESS WIRE)--July 23, 2003

Symantec Corp. (Nasdaq: SYMC), the world leader in Internet security, today reported results for the fiscal first quarter 2004 ended July 4, 2003. Symantec posted revenue for the quarter of $391 million, a 24 percent increase compared to $316 million for the same quarter last year.

GAAP Results: Net income for the fiscal first quarter was $68 million, compared to $57 million for the same quarter last year. Earnings per share was $0.41, compared to earnings per share of $0.36 for the year-ago quarter.

Non-GAAP Results: Non-GAAP net income for the fiscal first quarter was $75 million, compared to $66 million for the same quarter last year. Non-GAAP earnings per share was $0.45, compared to earnings per share of $0.41 for the year-ago quarter. Non-GAAP results, as outlined in the attached consolidated statements, exclude expenses from the amortization of other intangibles from acquisitions and restructuring and site closures as well as related income tax benefits. See "Use of Non-GAAP Financial Information" below.

"We continue to see strong performance across all segments of our business around the world, despite the difficult economic environment," said John W. Thompson, Symantec Chairman and CEO. "We believe our investments in the broadest range of security technologies and services delivered to the most diverse set of customers in our segment will continue to fuel the future growth of our company."

Revenue Components

For the quarter, Symantec's worldwide enterprise security business represented 42 percent of total revenue and grew 25 percent compared to the same quarter last year. Symantec's consumer business grew 35 percent and represented 43 percent of total revenue. Symantec's enterprise administration business declined 11 percent in line with expectations and represented 13 percent of total revenue while the services business grew 160 percent and represented 2 percent of total revenue.

International revenues represented 51 percent of total revenue in the first quarter and grew 33 percent over the same quarter last year. The Europe, Middle East and Africa region led the increase for the quarter with 55 percent growth, followed by Latin America with 25 percent growth. Japan recorded 12 percent year-over-year growth with Asia Pacific at 8 percent growth. The United States grew at 16 percent.

Business Outlook

Management offers the following forward-looking guidance for the fiscal second quarter 2004 ending Oct. 3, 2003:

-- Revenue is expected to be in the range of $375 to $395

million.

-- GAAP earnings per share is expected to be $0.38 at the

midpoint of the revenue guidance.

-- Non-GAAP earnings per share is expected to be $0.41 at the

midpoint of the revenue guidance.

Management offers the following forward-looking guidance for fiscal year 2004, ending April 2, 2004, updated to reflect the actual results from the fiscal first quarter and estimated results for the fiscal second quarter:

-- Revenue is expected to be approximately $1.665 billion.

-- GAAP earnings per share is expected to be $1.82 at the stated

revenue forecast, up 7 cents from previous guidance provided

in April.

-- Non-GAAP earnings per share is expected to be $1.96 at the

stated revenue forecast, up 8 cents from previous guidance

provided in April.

Non-GAAP earnings per share excludes the pre-tax amortization of intangibles and restructuring charges from acquisitions of approximately $6 million and $25 million for the quarter ending Oct. 3, 2003 and the fiscal year ending April 2, 2004, respectively.

Quarterly Highlights

-- Symantec signed 152 contracts worldwide worth more than

$100,000 each, including 30 worth more than $300,000 each and

4 worth more than $1 million each, during the quarter.

Symantec signed new or extended agreements with customers

including Alcoa; The University of Texas; Home Box Office; the

State of Minnesota Dept. of Human Services; Time Inc.; Premier

Inc., a leading health care alliance in the United States;

Kroger Co., one of the nation's largest retail grocery chains;

the U.S. Department of Veterans Affairs; the U.S. Department

of Education; the U. S. Transportation Safety Administration;

and News Corporation, a diversified international media and

entertainment company.

-- Around the world, Symantec signed contracts with customers

including Fortis Bank, an international financial services

provider in the fields of insurance, banking and investments;

Actia, a worldwide group of leading companies specialized in

vehicle electronics and diagnostics; Pechiney, an

international business group whose three core businesses are

primary aluminum, aluminum conversion and packaging; Vivarte,

a leading European manufacturer of shoes; Kredyt Bank, one of

Poland's largest banks and financial services companies;

Samsung in Korea; and Bank of China.

-- During the quarter, Symantec introduced the latest update to

the Symantec Security Management System. Symantec Incident

Manager 2.0 uses real-time, automated correlation to identify

and prioritize security incidents, allowing enterprises to

proactively secure their network against known threats and

respond to new attacks in real time.

-- Symantec also launched Symantec ManHunt 3.0, providing

multi-gigabit network intrusion detection, real-time threat

analysis, and proactive prevention and response capabilities

to protect organizations against emerging threats and

denial-of-service attacks; Symantec Decoy Server, a "honeypot"

intrusion detection system (IDS) that detects, contains and

monitors unauthorized access and system misuse as it happens;

and Symantec Host IDS 4.1, scalable intrusion detection and

prevention capabilities for business critical servers.

-- In addition, Symantec released Symantec Vulnerability

Assessment, which provides greater control of the network

infrastructure through the identification and prioritization

of vulnerabilities and by providing extensive information on

remediation actions. During the quarter, Symantec also

launched an update to the world's leading remote control

solution. pcAnywhere 11.0 extends beyond remote control by

providing IT administrators integrated remote management tools

and enhanced file transfer to further accelerate helpdesk and

server support problem resolution.

-- HP joined the Symantec Technology Partner Program with its HP

OpenView management software. HP's participation in the

program will focus on joint marketing activities around the

Smart Plug-in being designed to integrate the Symantec

Enterprise Security Architecture with HP OpenView Operations.

Symantec's integration effort is expected to allow HP OpenView

customers to view actionable security incident alerts within

their network infrastructure management console.

Conference Call

Symantec has scheduled a conference call for 5 p.m. EDT/2 p.m. PDT today to discuss fiscal first quarter 2004 results, and to review guidance for the fiscal second quarter. Interested parties may access the conference call on the Internet at http://www.symantec.com/invest/index.html. To listen to the live call, please go to the Web site at least 15 minutes early to register, download and install any necessary audio software. A replay and the script of our officers' remarks will be available on the investor relations home page shortly after the call is completed.

About Symantec

Symantec, the world leader in Internet security technology, provides a broad range of content and network security software and appliance solutions to individuals, enterprises and service providers. The company is a leading provider of client, gateway and server security solutions for virus protection, firewall and virtual private network, vulnerability management, intrusion detection, Internet content and e-mail filtering, remote management technologies and security services to enterprises and service providers around the world. Symantec's Norton brand of consumer security products is a leader in worldwide retail sales and industry awards. Headquartered in Cupertino, Calif., Symantec has worldwide operations in 36 countries. For more information, please visit www.symantec.com.

NOTE TO EDITORS: If you would like additional information on Symantec Corporation and its products, please view the Symantec Press Center at http://www.symantec.com/PressCenter/ on Symantec's Web site. All prices noted are in US dollars and are valid only in the United States.

Symantec and the Symantec logo are trademarks or registered trademarks, in the United States and certain other countries, of Symantec Corporation. Additional company and product names may be trademarks or registered trademarks of the individual companies and are respectfully acknowledged.

FORWARD LOOKING STATEMENT: This press release contains forward-looking statements, including forecasts of future revenue and earnings per share, expected activities, and other financial and business results that involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by this press release. Such risk factors include, among others: the sustainability of recent growth rates, particularly in consumer products; the anticipation of the growth of certain market segments, particularly enterprise security; the positioning of Symantec's products in those segments; the competitive environment in the software industry; general market conditions, fluctuations in currency exchange rates, changes to operating systems and product strategy by vendors of operating systems; and whether Symantec can successfully develop new products and the degree to which these gain market acceptance. Actual results may differ materially from those contained in the forward-looking statements in this press release. Additional information concerning these and other risk factors is contained in the Risk Factors sections of Symantec's previously filed Form 10-K for the fiscal year ended March 28, 2003. Symantec assumes no obligation to update any forward-looking information contained in this press release except as otherwise required by law.

USE OF NON-GAAP FINANCIAL INFORMATION: In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Symantec reports non-GAAP financial results. Non-GAAP net income and earnings per share exclude acquisition related charges, such as amortization of goodwill and other intangibles, and certain other charges, such as restructurings and site closures, as well as the tax effect of these items. Symantec's management believes these non-GAAP measures are useful to investors because they provide supplemental information that facilitates comparisons to prior periods. Management uses these non-GAAP measures to evaluate its financial results, develop budgets and manage expenditures. The method Symantec uses to produce non-GAAP results is not computed according to GAAP, is likely to differ from the methods used by other companies and should not be regarded as a replacement for corresponding GAAP measures. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the comparable GAAP results, which is attached to this release and can be found on the investor relations Web site at www.symantec.com/invest/center.html.

SYMANTEC CORPORATION

GAAP Consolidated Statements of Income

(In thousands, except per share data; unaudited)

                                                  Three Months Ended
                                                       June 30,
                                                  2003          2002
                                               ---------     ---------
Net revenues                                   $391,124      $316,041
Cost of revenues                                 67,578        55,452
                                               ---------     ---------
    Gross margin                                323,546       260,589
Operating expenses:
 Research and development                        60,605        45,488
 Sales and marketing                            141,837       115,168
 General and administrative                      26,372        15,354
 Amortization of other intangibles from
  acquisitions                                      791           536
 Restructuring, site closures and other             568         6,053
                                               ---------     ---------
       Total operating expenses                 230,173       182,599
                                               ---------     ---------
Operating income                                 93,373        77,990
Interest income                                  10,097         9,646
Interest expense                                 (5,291)       (5,291)
Income, net of expense, from sale of
 technologies and product lines                   2,168         2,236
Other expense, net                                 (711)         (991)
                                               ---------     ---------
Income before income taxes                       99,636        83,590
Provision for income taxes                       31,392        27,021
                                               ---------     ---------
Net income                                     $ 68,244      $ 56,569
                                               =========     =========
Net income per share - diluted*                $   0.41      $   0.36
                                               =========     =========
Shares used to compute net income
 per share - diluted*                           174,988       169,027
                                               =========     =========

* For the three months ended June 30, 2003 and 2002, diluted net
income per share is calculated using the if-converted method. Under
this method, the numerator excludes the interest expense from the 3%
convertible subordinated notes, net of income tax, of $3.6M for each
of the three months ended June 30, 2003 and 2002, and the denominator
includes shares issuable from the assumed conversion of the 3%
convertible subordinated notes.



SYMANTEC CORPORATION

Non-GAAP Consolidated Statements of Income

Non-GAAP amounts exclude all acquisition related amortization
 and restructuring charges.

(In thousands, except per share data; unaudited)

                                                  Three Months Ended
                                                       June 30,
                                                  2003          2002
                                               ---------     ---------
Net revenues                                   $391,124      $316,041
Cost of revenues                                 58,813        49,123
                                               ---------     ---------
    Gross margin                                332,311       266,918
Operating expenses:
 Research and development                        60,605        45,488
 Sales and marketing                            141,837       115,168
 General and administrative                      26,372        15,354
                                               ---------     ---------
    Total operating expenses                    228,814       176,010
                                               ---------     ---------
Operating income                                103,497        90,908
Interest income                                  10,097         9,646
Interest expense                                 (5,291)       (5,291)
Income, net of expense, from sale of
 technologies and product lines                   2,168         2,236
Other expense, net                                 (711)         (991)
                                               ---------     ---------
Income before income taxes                      109,760        96,508
Provision for income taxes                       35,123        30,883
                                               ---------     ---------
Net income                                     $ 74,637      $ 65,625
                                               =========     =========
Net income per share - diluted*                $   0.45      $   0.41
                                               =========     =========
Shares used to compute net income
 per share - diluted*                           174,988       169,027
                                               =========     =========

* For the three months ended June 30, 2003 and 2002, diluted net
income per share is calculated using the if-converted method. Under
this method, the numerator excludes the interest expense from the 3%
convertible subordinated notes, net of income tax, of $3.6M for each
of the three months ended June 30, 2003 and 2002, and the denominator
includes shares issuable from the assumed conversion of the 3%
convertible subordinated notes.


Reconciliation of Non-GAAP Consolidated Statements of Income to
 the GAAP Consolidated Statements of Income

(In thousands, except per share data; unaudited)

                                                  Three Months Ended
                                                       June 30,
                                                  2003          2002
                                               ---------     ---------
Non-GAAP net income                            $ 74,637      $ 65,625

Cost of revenues:
 Amortization of other intangibles
  from acquisition                               (8,765)       (6,329)

Operating expenses:
 Amortization of other intangibles
  from acquisitions                                (791)         (536)
 Restructuring, site closures and other            (568)       (6,053)

Income tax benefit                                3,731         3,862
                                               ---------     ---------
Net income                                     $ 68,244      $ 56,569
                                               =========     =========
Net income per share - diluted                 $   0.41      $   0.36
                                               =========     =========
Shares used to compute net income
 per share - diluted                            174,988       169,027
                                               =========     =========


SYMANTEC CORPORATION

Consolidated Balance Sheets

(In thousands)
                                              June 30,      March 31,
                                                2003          2003
                                            (unaudited)
ASSETS
Current assets:
 Cash, cash equivalents and short-term
  investments                               $1,908,525    $1,705,658
 Trade accounts receivable, net                129,327       149,664
 Inventories                                     3,824         5,912
 Deferred income taxes                          92,566        92,284
 Other                                          42,629        34,628
                                            -----------   -----------
    Total current assets                     2,176,871     1,988,146

Property, equipment and leasehold
 improvements, net                             341,890       333,275
Deferred income taxes                            7,986         7,986
Acquired product rights, net                    76,656        73,125
Goodwill, net                                  833,228       833,449
Other, net                                      29,135        29,749
                                            -----------   -----------
                                            $3,465,766    $3,265,730
                                            ===========   ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable                           $   66,199    $   67,720
 Accrued compensation and benefits              68,010        90,947
 Deferred revenue                              612,179       589,629
 Other accrued expenses                         66,390        69,363
 Income taxes payable                           85,251        76,965
                                            -----------   -----------
    Total current liabilities                  898,029       894,624

Convertible subordinated notes                 599,995       599,998
Other long-term obligations                      6,643         6,729

Commitments and contingencies

Stockholders' equity:
 Common stock                                    1,512         1,488
 Capital in excess of par value              1,404,228     1,335,028
 Accumulated other comprehensive income         89,373        30,121
 Retained earnings                             465,986       397,742
                                            -----------   -----------
    Total stockholders' equity               1,961,099     1,764,379
                                            -----------   -----------
                                            $3,465,766    $3,265,730
                                            ===========   ===========