(Updates with executive change)
By Michael Calia
CA Inc. (CA) said its fiscal third-quarter profit fell 7.6% as
the software maker posted a drop in its top line, dragged down by a
revenue decline in its key subscription and maintenance
business.
Shares of CA were up 8% to $37 in after-hours trading, however,
as results surpassed expectations and the company again boosted its
guidance for the fiscal year.
The company again raised its year outlook, saying it now expects
adjusted per-share earnings of $3.05 to $3.12, up from its October
projection of $2.96 to $3.03. The company also said it expects
revenue of $4.52 billion to $4.57 billion, up from its previous
call of $4.39 billion to $4.48 billion.
CA, formerly known as Computer Associates, produces software for
mainframe computers and other hardware, an industry that has
struggled recently. The company has sought to improve its
marketing, and last year it unveiled a plan to focus on
higher-priority products by cutting jobs and consolidating its
development sites.
"While I'm encouraged by our performance in Q3, we need to
continue to improve our execution across development, marketing and
sales," Chief Executive Mike Gregoire said. "Based on our results
so far this year, we expect our fiscal year 2015 revenue growth
rate and non-GAAP operating margin to be similar to fiscal year
2014."
The company on Tuesday also said George Fischer, executive vice
president and group executive of worldwide sales and services, is
leaving the company after a 20-year tenure. Adam Elster, currently
the head of CA's mainframe and customer success business, takes
over effective immediately, the company added.
For the quarter ended Dec. 31, CA reported a profit of $232
million, or 51 cents a share, down from $251 million, or 55 cents a
share, in the prior-year period. Excluding share-based compensation
and other items, adjusted per-share earnings rose to 84 cents from
63 cents.
Revenue dropped 2.7% to $1.16 billion. The company has reported
revenue declines for seven consecutive quarters.
Analysts surveyed by Thomson Reuters had projected a profit of
70 cents a share on revenue of $1.13 billion.
Subscription and maintenance revenue, which contributes the
lion's share of the company's top line, fell 1.6% to $951 million.
Professional services revenue decreased 3.1%, and revenue from
software fees and other businesses fell 11%.
Expenses edged up to $829 million.
Write to Michael Calia at michael.calia@wsj.com
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