Symantec fires CEO Salem
Symantec Corp unexpectedly fired CEO Enrique Salem and replaced him with its chairman Steve Bennett, who launched a strategic review in a bid to turn around the company, which has disappointed investors with lackluster growth in recent years.
Shares of the software maker soared 16 percent on the news as some investors speculated that Bennett might consider divesting assets or splitting up Symantec, which also reported quarterly results on Wednesday.
"I took this job because I believe that our assets are better than our performance," Bennett, a former CEO of financial software maker Intuit Corp, said during a conference call.
Bennett said in an interview he planned to turn Symantec around using the management basics he learned in the first part of his career, a 23-year stint managing a diverse group of businesses for industrial conglomerate General Electric Co .
He declined to say whether he would consider divesting any assets, but said he was not brought in to sell the company.
"The agreement I have with the board is to create long-term shareholder value," said Bennett, who is 58. "This is my third job in a 35-year business career. This will be my last job."
Salem, who left the office Tuesday after the board formally decided to fire him, could not be reached for comment.
Symantec shares rose $2.09 to $15.26 in morning trading.
FBR Capital Markets analyst Daniel Ives said that the departure of Salem opened up "a range of possibilities" that could help the stock going forward.
"Investors will interpret this as a clear positive sign that Symantec and its board are finally willing to move in the right direction," Ives said.
Bennett said he had met with Salem on Monday to tell him that the board was considering replacing him.
"Enrique is a first class guy and I like Enrique a lot. I'm disappointed that I was not able to help him," Bennett told Reuters.
Bennett said he plans to conduct a review over three to four months, which will include a "listening and learning tour" to meet with customers, employees and partners around the world.
He will announce his strategic plan for the company toward the end at the end of that period.
"I am completely wide open," he said in a conference call. "I don't feel constrained by the board."
Symantec, which had not previously said it was considering replacing Salem, also issued a quarterly outlook on Wednesday that was below analysts' projections.
It forecast fiscal second-quarter earnings per share in a range of 35 cents to 39 cents, below the Street view of 40 cents, according to Thomson Reuters I/B/E/S.
The company also projected that revenue would drop about 1 percent, to between $1.635 billion and $1.665 billion. That's below the $1.69-billion average forecast of analysts polled by Reuters.
The company, whose rivals include Intel Corp's McAfee division and EMC Corp, also released results for its fiscal first quarter through June 29. It reported a profit, excluding items, of 43 cents, ahead of the 38-cent average forecast of analysts.
Revenue grew 1 percent from a year earlier to $1.67 billion, slightly ahead of analysts' average estimate of $1.65 billion.