Computer security expert Symantec
On the other side, Cisco Systems
But these threats are not hurting Symantec today. In the second quarter, Symantec saw sales fall a mere 3% from 2008 levels to $1.47 billion, while the backlog of deferred contract revenue grew 7% to $2.91 billion. This adds up to a strong base of recurring revenue that more than makes up for a drop in short-term spending and one-off license deals. And 51% of the sales happened abroad. If this business model is starting to sound familiar, you're probably thinking about IBM
The strong sales trickled down the income statement to product earnings of $0.18 per share, 20% higher than last year's $0.15 per share. For the next quarter, management sees even more contract revenue building up while top-line sales stay at about $1.5 billion. It's a beautiful model, and the fact that Symantec's customers are so eager to sign long-term licenses and support contracts tells me that they won't jump to the new competition any time soon.
Do you use Symantec's Norton security products, or do you just go with whatever Microsoft hands down from On High? If you're one of those Apple
Fool contributor Anders Bylund holds no position in any of the companies discussed here. He is way too big a nerd to share John Q. Everyman's view of computer security. Apple is a Motley Fool Stock Advisor recommendation. Microsoft and Symantec are Motley Fool Inside Value picks. Microsoft is a Motley Fool Options selection. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.