Network Associates' stock spikes

The company sees its stock jump more than 10 percent in trading after it reported better-than-expected earnings for its first quarter.

2 min read
Network Associates saw its stock jump more than 10 percent in early active trading after the supplier of enterprise network security and management software reported better-than-expected earnings for its first quarter of 1998.

The stock climbed to 72.06 before settling back slightly to close at 70.75, up 6.5 points from yesterday?s close of 64.25. More than 4 million shares traded hands, more than double the average daily trading.

Revenue for the first quarter ending March 31, reached $188.4 million, a 33 percent increase over the $141.4 million reported in the same period a year ago.

Excluding charges, net income for the first quarter grew to $41.6 million or 56 cents a share, from $13.3 million or 18 cents a share in the same period in 1997.

Analysts were expecting profits of 54 cents a share, according to First Call.

During the quarter, the company had several product announcements across all of Network Associates' business units, including its Net Tools Secure, a network security suite, which includes enterprise encryption, authentication, policy management, intrusion detection, and firewall protection.

The company began shipping strong encryption overseas.

Network Associates also announced an agreement to acquire Trusted Information Systems (TIS), a provider of security solutions for enterprise. The deal is subject to TIS stockholder approval and is expected to close early in the second quarter of 1998.

Following the close of the quarter, Network Associates, a company that resulted from a merger last year between McAfee and Network General, laid off about 10 percent of its 1,800 employees as part of an across-the-board restructuring.

The 180 employees affected by the restructuring were notified in early April. The company also said it would close an office located in Herndon, Virginia.

Since the McAfee/Network General merger, the combined company has since acquired Pretty Good Privacy, Helix Software, Trusted Information Systems, and Magic Solutions.