SYMC Symantec Corporation

By Patrick Thomas 

Symantec Corp. Chief Executive Greg Clark abruptly resigned Thursday, sending shares of the antivirus software provider tumbling 13% during after-market trading.

The California company said board member Richard Hill, 67 years old, would succeed Mr. Clark on an interim basis until a permanent CEO is found.

The CEO departure came as Symantec also named a new finance chief and guidance for the current fiscal year came in below analysts' forecasts. Shares in the company have fallen 23% over the past 12 months.

Mr. Clark, 53, had been Symantec's chief since 2016, after the company bought cybersecurity firm Blue Coat, where he was CEO. Mr. Clark also resigned Thursday as a Symantec director, shrinking the size of the board to 12.

Symantec spent about $7 billion in recent years on two high-profile acquisitions -- Blue Coat and identity-theft-protection company LifeLock -- deals that were met with enthusiasm from investors.

However, the company has been struggling to grow its enterprise security unit, which sells to businesses and makes up a majority of the company's revenue. Bookings were lower than expected in the most recent quarter, as Symantec said it would focus on increasing sales productivity and expanding profit margins, among other goals.

Mr. Hill, the incoming CEO, joined Symantec's board in January. He has served as chairman of semiconductor company Marvell Technology Group Ltd. since 2016 and is the former CEO of Novellus Systems Inc.

His board appointment came after activist investor Starboard Value LP took a 5% stake in Symantec last year and sought to overhaul the board. Symantec added Mr. Hill, Starboard managing member Peter Feld and director Dale Fuller to its board as part of a settlement with Starboard.

"Peter went to his bullpen for a left-handed pitcher and voila, I'm here, " Mr. Hill told analysts on a conference call Thursday.

Starboard, a New York hedge fund, has a 5.6% stake in Symantec, according to FactSet data.

Several analysts asked Mr. Hill on the call about the sudden departure of Mr. Clark.

"I think that the reality of where we are today is -- it's been a hard slog. And for anyone, and certainly, someone with the pride of Greg, he doesn't like to see the results that happened in the fourth quarter," Mr. Hill said.

Mr. Hill added that Mr. Clark's departure was not connected to a Securities and Exchange Commission investigation regarding unspecified issues with financial reporting.

Symantec said last year that it opened the internal probe and notified the SEC after a former employee raised some concerns. The company didn't specify what the former employee said, or what period was under review. However, the company said it completed its internal investigation in September.

Mr. Hill's compensation has yet to be determined, according to a Symantec filing.

Symantec said Vincent Pilette, the former financial chief of Logitech International SA and a former Hewlett Packard Enterprise Co. executive, will begin serving as its new chief financial officer on May 21. The company said in January that then-finance chief Nicholas Noviello would leave the company to pursue other opportunities.

In the latest period, Symantec said Thursday that fourth-quarter revenue fell 2% to $1.19 billion, slightly lower than what analysts had forecast.

Symantec swung to a profit of $34 million, or 5 cents a share, helped by operating expenses falling 15% from a year earlier. The year-ago quarter contained $132 million in restructuring costs.

Excluding one-time items, earnings were 39 cents a share, compared with the 34 cents expected from analysts.

For its current fiscal year, the company guided revenue between $4.75 billion and $4.89 billion and earnings between 57 cents and 73 cents a share. Analysts had been predicting a profit of 56 cents a share on $4.97 billion in revenue for the year.

(END) Dow Jones Newswires

May 09, 2019 20:04 ET (00:04 GMT)

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