CA beats expectations on pro forma basis

Computer Associates International Inc. (CA) once again turned in financial results showing a wide gap between revenue calculated using standard accounting principles and pro-forma revenue figures, adjusted to reflect the new business model CA adopted in late 2000.

Under its own pro-forma calculations, CA generated US$1.44 billion in revenue during its second fiscal quarter of 2002, ended Sept. 30. The company posted pro forma operating earnings of $0.61 per share, handily beating analyst estimates. Analysts polled by Thomson Financial/First Call forecast pro-forma earnings of $0.52 per share.

Product revenue of $1.37 billion on a pro-forma basis comprised the bulk of CA's revenue for the quarter, with professional services generating revenue of $72 million. Total pro-forma revenue for the six-month period ended in late September was $2.73 billion, up from $2.43 billion in the year-ago six-month period.

Pro-forma net operating income for the quarter was $359 million, up from $229 million in the year-ago quarter.

Under generally accepted accounting principles, CA generated revenue of $734 million and an operating loss of $0.16 per share. The company had a $291 million net loss for the quarter and a $633 million net loss for the just-ended six-month period, on an as-reported basis. In the year-ago six-month period, CA posted $161 million in net income.

CA's revamped business model recognizes product revenue on a ratable basis, booking contracted revenue over the life of a license, rather than all at once when the license is signed. The new model provides greater stability and future visibility for financial results, according to CA.

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