CA turns a profit in Q3, sells off unit

Computer Associates International Inc. broke into profitability again during its third quarter, beating its own optimistic revenue guidance by US$27 million.

The Islandia, N.Y.-based systems management software maker Wednesday announced its third-quarter results for fiscal 2004, reporting a jump in revenue to US$844 million, a 12 percent increase over the same quarter in the prior year. That figure exceeded CA's own high estimate of $817 million in revenue.

Income from continuing operations totaled US$21 million, compared with a loss of US$47 million in the same quarter last year.

That number excludes US$29 million in revenue generated by CA's business software subsidiary, ACCPAC International Inc., which it sold in December for US$88 million.

From a sequential point of view, the latest earnings figures mark a reversal from the second quarter, when CA reported a loss of US$87 million on revenue of US$833 million -- largely because of a US$113 million litigation settlement.

In its statement, the company attributed the uptick to strong channel and services performance, as well as the stronger position of the euro over the U.S. dollar.

"We obviously are pleased with the company's performance in the third quarter," said Sanjay Kumar, CA's chairman and CEO. "Overall bookings, which increased substantially over last year, performance in our channel business, and strength in worldwide operations all contributed to this strong performance."

CA, which recognizes revenue quarterly over the life of a contract rather than upfront, now has amassed subscription fees of nearly $4 billion.

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