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CA Q3 Earnings Jump, Top Estimate; Boosts FY08 Outlook
CA, Inc. (CA), formerly Computer Associates International, Inc., said Thursday after the markets closed that third quarter earnings more than tripled from last year, helped by higher revenue, better expense control as well as lower amortization and restructuring costs. The company's quarterly earnings per share, excluding items, breezed past Wall Street expectations. The company also raised its revenue and earnings forecast for the fiscal year 2008.

The Islandia, New York-based management software company reported GAAP net income for the third quarter of $163 million or $0.31 per share, compared to $50 million or $0.09 per share for the year-ago quarter.

GAAP income from continuing operations for the third quarter was $163 million or $0.31 per share, compared to $52 million or $0.10 per share in the prior year quarter.

Excluding purchased software and intangibles, amortization, restructuring and other costs, non-GAAP income from continuing operations for the third quarter was $192 million or $0.36 per share, compared to $133 million or $0.24 per share a year earlier.

On average, 13 analysts polled by First Call / Thomson Financial expected the company to earn $0.25 per share for the third quarter.

GAAP operating margin for the third quarter was 23%, compared to 9% in the prior year quarter. Non-GAAP operating margin for the third quarter was 27%, compared to 21% in the year-ago quarter.

Total expenses, before interest and income taxes, for the third quarter fell 6% to $851 million from $907 million a year ago, reflecting a decrease in amortization of capitalized software. Non-GAAP operating expenses for the quarter increased 1% to $800 million from $791 million in the prior year period.

Total revenue for the third quarter increased 10% to $1.100 billion from $1.002 billion in the same quarter last year. Eleven analysts had consensus revenue estimate of $1.04 billion for the company's third quarter.

Total North American revenue was increased 5% in the third quarter while revenue from international operations rose 17% as compared to the third quarter of last year.

Total product and services bookings in the third quarter were $1.23 billion, down 21% from $1.55 billion in the year-ago quarter.

Cash flow from operations for the third quarter was $233 million, compared to $587 million in the third quarter of last year.

“CA has recorded another solid quarter - our fifth in a row,” said John Swainson, CA's president and chief executive officer.

For the nine months, the company reported GAAP net income of $429 million or $0.80 per share, compared to $138 million or $0.25 per share for the same period last year.

GAAP income from continuing operations for the nine-month period was $429 million or $0.80 per share, compared to $141 million or $0.25 per share in the prior year period.

Non-GAAP income from continuing operations for the nine-month period was $524 million or $0.97 per share, compared to $390 million or $0.68 per share in the comparable year-ago period.

Total revenue for the nine-month period increased 9% to %3.19 billion from $2.94 billion last year.

Additionally, the company raised its revenue and earnings guidance for the fiscal year 2008. For the fiscal year 2008, the company now expects revenue of $4.25 billion to $4.28 billion, GAAP earnings of $0.99 to $1.03 per share and non-GAAP operating earnings of $1.22 to $1.26 per share. Previously, the company expected revenue of $4.15 billion to $4.2 billion, GAAP earnings of $0.87 to $0.91 per share and non-GAAP operating earnings of $1.06 to $1.10 per share.

Analysts currently expect the company to earn $1.09 per share on revenue of $4.19 billion for the fiscal year 2008.

The company reaffirmed its full fiscal year 2008 cash flow from operations outlook of $1.05 billion to $1.1 billion.

Among others in the industry, EMC Corp. (EMC) earlier this week reported a 35.2% surge in fourth quarter profit, buoyed by double-digit percentage growth across all its major business segments.

The Hopkinton, Massachusetts-based company's GAAP net income for the fourth quarter surged to $525.73 million or $0.24 per share from $388.77 million or $0.18 per share in the year-ago quarter. Non-GAAP earnings for the quarter increased to $668.45 million or $0.30 per share from $507.68 million or $0.24 per share a year ago. Total revenue for the fourth quarter increased to $3.83 billion from $3.21 billion in the year-ago quarter.

CA shares, which are trading in the range of $21.76 to $28.46 over the last year, closed Thursday's regular trading session at $22.00, down 30 cents or 1.35% and lost an additional 10 cents in after hours trading.
http://www.rttnews.com/sp/todaystop.asp?date=01/31/2008&item=73