Symantec Releases Mobile Solutions; Websense A Good Buy For Oracle Or HP

Gartner projects worldwide security software revenues to grow 11.3% over the year in 2010 to cross $16.5 billion. The consumer security software market will remain the largest security software segment, with 2010 revenues projected to reach $4.2 billion in 2010, compared with $3.9 billion in 2009. The enterprise market is expected to reach $3 billion in 2010 from $2.9 billion in 2009. Computer security players Symantec (NASDAQ:SYMC) and Websense (NASDAQ:WBSN) also delivered results that exceeded the market’s targets for the quarter.

Symantec’s Financials
Symantec’s Q2 revenues increased 2% over the year to $1.48 billion with EPS of $0.34. The market was looking for revenues of $1.46 billion with EPS of $0.28.

By region, Europe, the Middle East, and Africa represented 28% of total revenues and declined 9% over the year. Asia Pacific and Japan revenues for the quarter grew 11% over the year to contribute 17% of overall revenues. The Americas, including the United States, Latin America, and Canada, represented 55% of total revenues and grew 3% over the year.

For the current quarter, Symantec is projecting revenues of $1.57 billion–$1.59 billion with EPS of $0.32–$0.33. The Street was expecting revenues of $1.56 billion with EPS of $0.32.

Norton Everywhere
Symantec is focusing on expanding their market reach by offering products that go beyond addressing security concerns for the PC to other Internet connected devices such as smart phones. They are terming this initiative “Norton Everywhere.” Earlier last quarter, the company released a beta version of Norton Mobile Security for the Android-based smartphones. They also cleared Norton DNS, which is a free tool that translates domain names to an IP address to prevent server-side attacks that can redirect normal Web traffic to malicious sites. Both solutions have received positive responses and have over 300,000 users to date.

Symantec’s Focus on the Data Storage Business
Of late, Symantec has been concerned with Relational Investors, which has been buying their shares to spin off the organization into a security and Veritas data storage business. But the company’s management does not want to spin off the data storage business and sees it as a critical component to Symantec’s growth.

They are working on integrating their security and storage technologies to create unique offerings such as Data Insight, which helps customers manage growth in unstructured data. They are also developing new storage management initiatives that are focused on helping customers virtualize applications and databases. Earlier this quarter, they launched the Application High Availability (AppHA) and VirtualStore. AppHA helps organizations virtualize their business-critical applications, and VirtualStore provides high-performance, low-cost storage for desktop and server virtualization deployments.

The stock is trading at $16.68 with a market capitalization of $12.95 billion. It touched a 52-week high of $19.16 earlier this year.

Websense’s Financials
At Websense (NASDAQ:WBSN), Q3 revenues were $85.3 million with EPS of $0.37. The market was looking revenues of $83.3 million with EPS of $0.30.

For the current fiscal year, Websense projects revenues of $335 million–$337 million with EPS of $1.22–$1.26. The Street projects revenues of $334.2 million with EPS of $1.19.

Websense’s Strategy
Websense is focusing on two key areas for growth – innovating content security technologies and transforming the sales team to sell integrated Web, data, and e-mail security offerings. The company recently released a new version of Websense Defensio 2.0 that automatically removes malicious content from business and social networking sites such as Facebook, Twitter, and blogs. The technology enhances the real-time threat intelligence of Websense products and analyzes more than 2.5 million comments and millions of URLs weekly.

Earlier last quarter, Websense discussed their intention of being available for a takeover. But as yet, no one has approached them for a buy-out. I still believe that players like HP and Oracle should be evaluating Websense for a potential acquisition.

The stock is trading at $21.39 with a market capitalization of $885 million. It touched a 52-week high of $25.28 in April of this year.