What happened

Shares of Symantec Corporation (NASDAQ:SYMC) dipped 32.7% in 2018, according to data from S&P Global Market Intelligence. The company's valuation was slashed and depressed amid an internal audit that added uncertainty to concerns that the business is stagnating.

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Symantec published fourth-quarter earnings for its 2018 fiscal year in May and paired the release with disappointing guidance and news that the company had initiated an internal audit after a former employee raised concerns about accounting practices. Shares lost roughly a third of their value in the next day's trading and have yet to sustain meaningful recovery despite the audit having concluded.

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So what

The internal audit dominated the discussion on Symantec stock for much of the year, but it found only one major accounting irregularity, which resulted in deferring roughly $12 million in revenue. The company published a press release detailing its findings in September, and one of the key passages is excerpted below:

In addition to the matters announced in May 2018, the Audit Committee reviewed a transaction with a customer for which $13 million was recognized as revenue in the fourth quarter of fiscal year 2018 (which is still an open period). After subsequent review of the transaction, the Company has concluded that $12 million of the $13 million should be deferred. Accordingly, the previously announced financial results for the fourth quarter of fiscal year 2018 and the first quarter of fiscal year 2019 (ended June 29, 2018) will be revised to take into account this deferral and any other financial adjustments required as a result of this revision.

While the findings of Symantec's review were not nearly as damaging as some investors had feared, there's still added uncertainty surrounding the stock as the SEC reviews the company's audit proceedings. On the other hand, reports that surfaced in November suggesting that Symantec was being looked at as an acquisition target by private equity firm Thoma Bravo triggered big stock gains and suggest that Symantec might get a bullish push as it emerges from the audit proceedings.

Now what

Symantec has a large enterprise customer base and opportunities to branch out its software service offerings. However, while its earnings have recently managed to surpass the market's average targets, the company hasn't been able to leverage its market position and recent acquisitions to generate healthy sales and earnings growth.

Symantec is scheduled to report third-quarter results after market close on Jan. 31. The company midpoint guidance calls for adjusted revenue of $1.175 billion and adjusted earnings per share of $0.39 -- down from $0.49 in the prior-year period. Symantec trades at roughly 13 times this year's expected earnings.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.