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Symantec Stock Plunges After Firm Announces Internal Probe

Symantec announced its fourth quarter and full year financial results on Thursday and while its revenue has increased, the cybersecurity firm’s stock dropped roughly 20% after it revealed that an internal investigation will likely delay its annual report to the U.S. Securities and Exchange Commission (SEC).

Symantec announced its fourth quarter and full year financial results on Thursday and while its revenue has increased, the cybersecurity firm’s stock dropped roughly 20% after it revealed that an internal investigation will likely delay its annual report to the U.S. Securities and Exchange Commission (SEC).

[Update – Shares of Symantec traded down more than 34% in early trading Friday, reaching levels below $19.00 per share.]

Symantec reported a Q4 GAAP revenue of $1.22 billion, which represents a 10% year-over-year increase, and $1.23 billion in non-GAAP revenue, an increase of 5% year-over-year.

As for the full fiscal year ended on March 30, GAAP revenue increased by 21% year-over-year to $4.84 billion, while non-GAAP revenue went up 19% to nearly $5 billion. The company said it had a cash flow of $950 million from operating activities for the fiscal year 2018.

Despite strong financial results, Symantec stock dropped from over $29 to less than $24 in after-hours trading after the company announced the launch of an internal investigation by the Audit Committee of the Board of Directors.

Few details have been made public by the company, but the probe was apparently triggered by concerns raised by a former employee. Symantec management did not share any additional details and canceled the “Q&A” part of its earnings call.

“The Audit Committee has retained independent counsel and other advisors to assist it in its investigation. The Company has voluntarily contacted the Securities and Exchange Commission to advise it that an internal investigation is underway, and the Audit Committee intends to provide additional information to the SEC as the investigation proceeds. The investigation is in its early stages and the Company cannot predict the duration or outcome of the investigation,” Symantec said.

The security firm believes it’s unlikely that it will be able to file its annual 10-K report with the SEC in a timely manner due to the investigation.

In response to news of the internal probe, investor rights law firm Rosen Law Firm announced the preparation of a class action to recover losses suffered by Symantec investors. Rosen says it’s investigating allegations that Symantec “may have issued materially misleading business information to the investing public.”

Related: Czech Antivirus Targets London’s Biggest Tech Float

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Written By

Eduard Kovacs (@EduardKovacs) is a contributing editor at SecurityWeek. He worked as a high school IT teacher for two years before starting a career in journalism as Softpedia’s security news reporter. Eduard holds a bachelor’s degree in industrial informatics and a master’s degree in computer techniques applied in electrical engineering.

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