Software firm reports jump in fourth-quarter earnings.
Investors secured shares of McAfee on Friday after the company announced fourth-quarter gains and a new stock buyback plan.
The Santa Clara, Calif., company earned $54.5 million, or 34 cents per share, in the fourth quarter of 2009, up 20% from $45.4 million, or 29 cents per share in the year-ago quarter. Excluding one-time items, McAfee ( MFE - news - people ) said it earned 64 cents per share in the period ending Dec. 31, 2009.
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Sales for the quarter hit $525.7 million, up 24% from $424 million. According to the company, total sales were boosted by a 30% increase in sales to corporations, which reached $388 million in the fourth quarter of 2009, up from $188 million in the fourth quarter of 2008.
McAfee matched the profit estimates of analysts polled by Thomson Financial and beat the consensus sales prediction of $515 million.
On news of the better-than-expected earnings, investors flocked to McAfee sending shares up $1.49, or 4%, to $39.41 in Friday afternoon trading.
Along with its earnings, the security technology company said that Rocky Pimentel chief financial officer, will retire this year. McAfee has begun a search process to find his replacement, and Pimentel will stay on to help the transition process.
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Goldman Sachs analyst Sarah Friar said that she was "surprised" by Mr. Pimentel’s retirement, "given his relatively short tenure at McAfee (he joined in May 2008), and we expect uncertainty about his successor to create a near-term overhang."
McAfee announced that its board of directors approved a stock repurchase program of up to $500 million to be carried out through December 2011. Repurchases may occur on the open market or through privately negotiated deals. With many U.S. companies sitting on sizable cash piles after slashing costs during the recession, buybacks are picking up across a number of industries. (See: Pepsi Buyback Is Part Of A Trend)
In a new initiative McAfee said it will partner with Facebook to create a customized security software program--a custom scanning and repair tool--and consumer-friendly education material to help Facebook users understand the privacy tools.
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