CA returns to profitability

Computer Associates International (CA) returned to profitability in its most recent quarter, reporting better-than-expected results showing revenue and income gains over the same quarter last year.

Strong sales and internal cost-cutting helped the company get out of the red sooner than expected, chairman and chief executive officer, Sanjay Kumar, said.

Revenue for the quarter ended June 30, the first of CA's fiscal year, was $US813 million, up 6 per cent from the year-earlier figure of $US765 million. CA's net income was $US10 million, versus a $US65 million loss in the year-earlier quarter.

CA has been pushing its customers to purchase its software through short-term subscription contracts rather than one-time licensing fees.

The company's average contact duration is now down to 2.85 years, and its backlog of contracted but not yet booked revenue totals $US3.8 billion, CA said.

Because of that ongoing shift, the company's revenue from subscription fees grew from $US314 million in last year's first quarter to $US449 million in the just-ended quarter. Non-subscription software fees, maintenance, financial and professional services revenue all dropped year-on-year.

CA hopes to reverse the downward trend of its services revenue with a new organisation, CA Technology Services, formed in April. The group focuses exclusively on supporting CA's own products. CA expected the current tight economic climate to last for the next several quarters, Kumar said.