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CA fourth quarter reports, outlook is cautious

CA fourth quarter reports, outlook is cautious

Computer Associates International has said pro forma revenue for its fourth fiscal quarter increased 3.6 per cent from a year ago, as its bread-and-butter mainframe software business recovered from some early lacklustre performance.

For the three months ending March 30, CA reported pro forma net operating income of $US274 million, up 32.4 per cent against the year-ago quarter, on the back of $1.44 billion in pro forma revenue. CA's pro forma operating earnings per share were 47 cents, slightly ahead of Thomson Financial/First Call's consensus estimate of 46 cents per share and in line with revised estimates issued by CA in mid-April.

The figures were included in a complicated earnings report resulting from an accounting change made by the company mid-year relating to the way it records revenue. CA now recognises product revenue over the term of its licensing agreements, whereas previously it booked revenue as transactions closed. The pro forma figures exclude certain charges such as acquisition-related costs. Using generally accepted accounting principals, CA reported a loss of $410 million for the quarter against net income of $392 million a year ago.

CA saw its mainframe business, based on IBM's OS/390 machines, barely expand on the equivalent quarter a year earlier. On a pro forma basis that business made up 48 per cent of CA's total revenue, down slightly from 50 per cent in the year earlier but still the largest sector by platform.

"We received a major disappointment last June when IBM's mainframe business was a real lacklustre performer," said Kumar. "We suffered early in the fiscal year, but I believe we recovered well and ended the year on a really, really positive note."


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