Symantec shares dive as it discloses internal probe (Update)

Symantec's audit committee launched an internal investigation "in connection with concerns raised by a former employee,&quo
Symantec's audit committee launched an internal investigation "in connection with concerns raised by a former employee," the company said in an earnings release 

Cybersecurity company Symantec lost more than one third of its market value Friday after it disclosed an internal probe and refused to take questions from analysts.

Shares of Symantec plunged 34.7 percent in midday trading to $19.07.

Symantec's audit committee launched the investigation "in connection with concerns raised by a former employee," the company said in an earnings release Thursday after the stock market closed.

The company "voluntarily contacted" the Securities and Exchange Commission about the probe and said the investigation could force it to restate financial results.

Cynthia Hiponia, Symantec's vice president for investor relations, said the probe "does not relate to any security concern or breach with respect to our products or systems," according to a transcript of an earnings conference call held late Thursday.

"Because this is an ongoing matter, we will be unable to comment further on this topic during today's call and there will be no question-and-answer session following our prepared remarks," she added.

Analysts were unnerved by the announcement, which flouts an unwritten rule of earnings season that executives face the music and take questions from Wall Street.

A note from Cowen called Symantec's handling of the matter "shocking," adding that, "while this may all amount to nothing, this is undoubtedly a serious matter and it could be awhile before transparency and investor confidence improves."

The disclosure came as Symantec reported a fourth-quarter loss of $35 million, compared with a loss of $143 million in the year-ago period.

Symantec's forecasts for profit per share and revenues lagged Wall Street analyst expectations.

"The audit investigation is driving the declines today, not helped by the soft guidance for the coming quarter and year," Briefing.com said in a note.


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Citation: Symantec shares dive as it discloses internal probe (Update) (2018, May 11) retrieved 19 April 2019 from https://phys.org/news/2018-05-symantec-stock-plunges-internal.html
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