Moody's and S&P Defend Symantec (SYMC, INTC, MFE, HPQ, PAR)

Symantec Corporation (NASDAQ: SYMC) finds itself at a strange place in time.  Shares were under pressure after the company issued an earnings warning about order pushouts. But when Intel Corporation (NASDAQ: INTC) announced the acquisition of McAfee (NYSE: MFE) and with Hewlett-Packard Co. (NYSE: HPQ) winning the 3PAR, Inc. (NYSE: PAR) buyout, there became renewed interest in the shares.  Frankly, the McAfee-Intel deal brings a huge risk and a huge opportunity for Symantec. There are calls from Standard & Poor’s and Moody’s that are bringing a positive light on the security software and storage player based upon an unsecured note offering.

S&P says that th3 ‘up to $1.1 billion senior unsecured note offering’ is getting a BBB rating with a stable outlook.  Its belief is that Symantec will maintain its market position and financial profile.  Additionally cited are a satisfactory positioning, a successful track record of acquiring and integrating operations, and also its growth opportunities in products, platforms, and geographies.

Moody’s gave a Baa2 rating based on a strong market position and based upon a solid credit profile. The company did however note that the company is constrained by an expected plan that acquisitions will continue to play an important role in its growth.  Also noted by Moody’s is that ongoing margin pressure limits the rating.

It was just on July 29 that some 62,181,800 shares traded hands and fell down to $13.03 from $14.67 and then from above $15.00 the week before.

What is amazing is that despite the company’s caution and despite the slowing in software and tech, shares are actually back above were they were before the earnings warning.  After a 0.75% rise so far on Monday, the stock is at $14.97.  Symantec is magically higher than when it warned in the first place.

JON C. OGG