NortonLifeLock NLOK reported first-quarter fiscal 2021 non-GAAP earnings of 31 cents per share that climbed 48% year over year. The figure also beat the Zacks Consensus Estimate of 21 cents. This outperformance was driven by strong execution and lower stranded costs.
Revenues grew 4% year over year to $614 million and beat the consensus mark of $598.4 million as well as.
Quarter Details
Direct average revenue per user (ARPU) increased 2.3% year over year to $9.03. Continued stabilization of direct customer count was a positive.
In the fiscal first quarter, gross profit decreased 4.7% year over year to $528 million. However, gross margin expanded 80 basis points (bps) on a year-over-year basis to 86%.
NortonLifeLock Inc. Price, Consensus and EPS Surprise
NortonLifeLock Inc. price-consensus-eps-surprise-chart | NortonLifeLock Inc. Quote
Operating income on a non-GAAP basis jumped 39.6% year over year to $289 million. Operating margin was 47.1%, up significantly from the year-ago quarter’s 31.8%.
Balance Sheet
As of Jul 3, 2020, NortonLifeLock had $1.1 billion in cash and cash equivalents compared with the prior quarter’s $2.3 billion. Long-term debt was $2.84 billion, down from the $3.47 billion witnessed in the previous quarter.
Notably, cash from from operations was $170 million.
Guidance
For the second quarter of fiscal 2021, NortonLifeLock projects revenues between $615 million and $625 million, suggesting 3-5% growth adjusting for ID Analytics revenues ($13 million).
Moreover, non-GAAP earnings from continuing operations are expected between 31 cents and 35 cents per share.
Zacks Rank and Other Key Picks
Currently, NortonLifeLock carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector include Benefitfocus BNFT, Cogent Communications Holdings CCOI and Synaptics SYNA, all carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term earnings growth rate for Benefitfocus, Cogent and Synaptics is currently pegged at 30%, 10.6%, and 10%, respectively.
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