According to media reports, The Boeing Company (BA) entered into an agreement with Symantec Corporation (SYMC), under which the latter agreed to purchase technology rights from the former’s cybersecurity business unit, Narus Inc. Per the deal, Symantec will also hire 65 engineers and data scientists from Boeing’s Narus security division.
Narus specializes in manufacturing Internet-filtering software and network monitoring technologies that are used widely by intelligence agencies and the U.S. government. It was acquired by Boeing in 2010 with expectations of expanding its revenue stream.
Narus was part of Network & Space Systems (“N&SS”) under Boeing’s Defense, Space & Security operating unit. But after Boeing struggled hard to find deals in the commercial cybersecurity space, it decided to divest its Narus unit. N&SS reported revenues of $5.8 billion in the nine months ended Sep 2014, down 6.7% from the prior-year period.
California-based Symantec, well known for the Norton Antivirus software, is currently focused on strengthening its presence in the cybersecurity market. In order to do so, it plans to split its data-storage and cybersecurity businesses into two publicly traded companies.
By departing from the commercial cybersecurity business, Boeing now intends to focus on developing cybersecurity technology for its military and government customers only.
Boeing has been consistently reporting upbeat numbers, having beaten earnings estimates in the last four quarters, with an average beat of 15.38%. We appreciate Boeing’s present focus on restructuring its business, which will favor long-term growth.
Boeing currently has a Zacks Rank #2 (Buy). Other equally well-placed stocks in the same sector include General Dynamics Corp. (GD) and Northrop Grumman Corporation (NOC).
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