CA profit up as revenue inches upward

CA profit up as revenue inches upward

CA turned in a third-quarter profit nearly twice last year's total, as the company's management continues working to rebuild business.

CA turned in a third-quarter profit nearly twice last year's total, as CA's overhauled management team continues working to rebuild the software company's business. Revenue during the quarter rose 5 per cent from the year-ago quarter, living up to management's cautious forecasts.

CA's revenue for the quarter ended December 31 was $US967 million, in the middle of the range it offered analysts last quarter as it tugged down their revenue expectations. At the time, the consensus estimate of analysts polled by Thomson Financial called for revenue of $US980 million.

CA said in October that its revenue would likely be lower, and by the time it announced its third-quarter results, Thomson Financial's consensus estimate was down to $US968 million.

CA's net income for the quarter was $US56 million, up from $US31 million during 2004's third quarter. Its operating EPS (earnings per share) came in at $US0.24, in line with the forecast CA issued in October.

CA's operating EPS calculation excludes an assortment of special charges, including acquisition amortization and restructuring costs.

CA (formerly Computer Associates) is working to restore its sales pipeline and customer credibility after an accounting scandal wiped out its executive ranks and brought to a head years of operational and customer-relations problems, issues that stemmed from its history of growing through acquisitions.

Chief executive officer, John Swainson, calls the company a work in progress, and said CA continued making enhancements to its business strategy in the third quarter.

CA's business continues to be lumpy, with customer billings during the quarter declining 1 per cent from last year's third quarter. Bookings for future business were strong in North America but down internationally, thanks in part to staff restructuring.

CA recently revamped its sales management in several countries, including the UK, Italy, China, Japan and South Korea, chief operating officer, Jeff Clarke, said.

"These changes are disruptive in the short term, but they're the right thing to do to strengthen our sales capabilities," he said.

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