Symantec is the latest well-known technology player to be mired in financial reporting difficulties. There is uncertainty around the key global security software provider after it posted its full year results.
Symantec said it is conducting an internal investigation through its audit committee, which will no doubt grab the attention of its channel partners. The inquiry began after concerns raised by a former Symantec employee.The company said it may miss the deadline to file its annual 10-K report to the US Security and Exchange Commission, which has been notified of the situation. Symantec said it may also have to restate some of its financial results, and its Q1/FY guidance. No other details about the potential problem have been released.
The news broke late last week, with Symantec’s stock falling by a third as a result - wiping around $6bn off the firm's market value.
Ahead of the investigation being completed, Symantec said full year GAAP revenue was up 21% year-on-year to $4.8bn, with net income hitting $1.2bn. In the previous year, Symantec made a net loss of $106m after acquisition and restructuring costs.
Martin Courtney, an analyst at TechMarketView, said of the situation: “Symantec appears keen to follow the right course of action but the probe will take time. What happens next will have a significant impact on Symantec’s business and reputation. Other companies - such as BT and Redcentric - have emerged heavily bruised but not irrevocably battered after going public about financial irregularities, with executive casualties and restructuring the order of the day.”
Last year, BT had to restate financial results for its BT Global Services business in Italy after a financial scandal. MSP Redcentric had to do the same and posted group losses as a result. Last week BT, following its full year results, which saw stagnant sales again, said it would be making 13,000 job cuts, but that it would be hiring 6,000 in service and deployment roles.
At the turn of the century, both Nortel and Worldcom never recovered from financial reporting scandals and went bankrupt.
