Symantec CEO: We Have Too Many Managers
Stifel Nicolaus analyst Todd Weller described the strategic overhaul as good for the company, citing a positive growth impact. Weller, however, expects limited upside for the company's shares in the near term, pointing to the risks involved in major organizational changes.
As a result, Weller downgraded the company to "hold" from "buy" this week.
The analyst noted that Symantec kept its focus on the same markets. "Likely to be viewed as somewhat surprising, Symantec is not making any significant changes (at least for the moment) with respect to its key market/product focus areas," he wrote in a note.
"We feel very comfortable about the markets that we're in and the assets
Symantec rolled out a new capital-allocation strategy this week, which, over time, will return about half of free cash flow to shareholders through dividends and share repurchases. As part of this effort, the software maker announced its first ever-cash dividend, targeting a yield of about 2.5%. The initial dividend payment will be made in the June quarter.
The company comfortably beat Wall Street's estimates in its third-quarter results on Wednesday, helped by strength in EMEA and the company's information management business.
Symantec shares rose 1.3% to $22 during Friday trading.
-- Written by James Rogers in New York.
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