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Symantec Corp., the world's biggest maker of cyber-security software, cut its earnings and sales forecasts for the fiscal fourth quarter and said Chief Executive Michael Brown will step down.
Shares tumbled.
Symantec will create a new Office of the President, and named Ajei Gopal to interim president during a search for a permanent CEO, it said in a statement Thursday.
Brown, who was CEO for the past year and a half, had also been Symantec's president. He will continue in the role until a successor is found.
The company, which completed the sale of its Veritas data-storage division in January, is looking for a replacement with experience running a cyber-security company or in selling software as a service, an area Symantec is focusing on more as it moves away from selling antivirus software that's installed directly on customers' computers, executives said on a conference call.
The CEO change was being discussed before the latest quarterly results came in and was based on Brown achieving the major goals he set when he was appointed, especially the sale of Veritas, they said.
"Michael Brown's departure was a complete surprise," said Steve Ashley, an analyst with Robert W. Baird & Co. in Milwaukee. "We believe investors had been pleased with his leadership during the reorganization of the company including the spin-off of Veritas."
The shares fell 6.1 percent to $17.01 at 9:48 a.m. in New York. They had fallen 14 percent this year through Wednesday.
Mountain View, Calif.-based Symantec has been struggling as slowing sales of personal computers drags down demand for its security software which is normally bundled inside.
As demand for traditional antivirus software falls, the company has been targeting businesses looking to protect themselves from increasingly sophisticated cyber attacks by making software with multiple layers of security.
Symantec was forced to lower the sale price for its Veritas data-storage unit to $7.4 billion from $8 billion, due to strains in the debt market. It agreed last August to sell the business to the Carlyle Group. Symantec will keep a stake in the business worth $400 million.
The company said it expects revenue of $873 million for its fiscal fourth-quarter, which ended April 1. That's lower than the previous company forecast of $885 million to $915 million.
The lower outlook is due to a shift in buying patterns from enterprise security customers that results in license revenue being shifted to future periods, Symantec said.
The change included a faster-than-expected transition to subscriptions and "ratable contract" models, it said.
Symantec said adjusted earnings would be 22 cents a share, compared with its earlier forecast of 24 cents to 27 cents. Adjusted operating margin will be 25 percent, lower than the 26 percent to 28 percent previously projected.