Software vendor CA, which has seen its share of financial troubles, saw some cause for cautious optimism Thursday with third-quarter results that show its business in a turn-around, the vendor believes.
Revenue rose 4 percent to US$1 billion in the third quarter of fiscal 2007, ended Dec. 31, 2006, although the company saw its net income fall 7 percent to US$52 million compared to US$56 million in the year-ago quarter. Earnings per share (EPS) were US$0.09, down from the previous year's US$0.10.
"I am pleased with our third quarter performance," John Swainson, CA president and CEO, said in a statement. He described three months in which the company witnessed "healthy demand' for its enterprise IT management software, particularly around technologies it had acquired. Revenue from professional services grew 11 percent over the year-ago quarter.
Discounting the impact of recent acquisitions and other factors, CA's net income was down 14 percent to US$50 million compared to the third quarter of fiscal 2006, while EPS was US$0.24.
A consensus estimate of Thomson Financial analysts had predicted that CA would report revenue of US$985 million on an EPS of US$0.21.
CA's realignment of its sales force which begun last year helped the company to retain, renew and expand key contracts, notably six licenses agreements with an aggregate value of around US$472 million, with one contract worth more than US$100 million.
As part of its ongoing restructuring efforts, the vendor reported US$14 million in severance costs and US$15 million related to the closing of facilities. Back in August, CA announced plans to cut around 1,700 after net income for the first quarter of fiscal 2007 fell 64 percent.
For fiscal 2007, CA is predicting that revenue will come in above its earlier guidance of US$3.9 billion, with an EPS of between US$0.83 and US$0.86.