CA's Q1 Results Top Analysts Estimate by 1 Cent

WASHINGTON (07/20/2000) - Computer Associates International Inc. (CA) Thursday announced first-quarter net income of US$180 million, or 14 cents per diluted share, a performance slightly better than projections, which took into account a profit warning issued earlier this month.

The $180 million profit for the quarter that ended June 30 includes a special gain of $153 million, but does not include amortization attributed to previous acquisitions, CA said in a written statement.

Fourteen analysts polled by First Call/Thomson Financial predicted that CA's first-quarter earnings per share would be 13 cents. Prior to the profit warning, analysts had estimated that CA would report earnings per share of 55 cents for the first quarter.

CA compared the profit figures against a net loss of $374 million in the same quarter last year, which included a $646 million charge related to the acquisition of Platinum Technologies Inc.

Sales during the quarter totaled $1.28 billion an increase of 5 percent over the $1.22 billion reported in the previous year's first quarter, CA said.

The company's performance was disappointing, but the results reflected the challenging environment that many software companies faced in the past quarter, said Sanjay Kumar, president and chief operating officer of CA, in the statement.

Despite the challenges, CA saw continued momentum from its distributed enterprise management business in the growth areas of electronic-business infrastructure management, security and storage management, Kumar said.

In its profit warning issued July 4, CA said that sales for the first fiscal quarter of 2000 would likely be between $1.25 billion and $1.3 billion. [See "CA, BMC See Shares Dive in Wake of Profit Warnings," July 5.] CA estimated that earnings per share excluding amortization and one-time gains would be between 11 cents and 16 cents.

When CA issued its profit warning, it cited as contributing factors a number of larger sales falling through, continuing poor performance by CA's European sales force and a slowing down in OS/390 mainframe sales. Customers may have delayed purchasing CA mainframe software in anticipation of a new IBM Corp. mainframe, known as G7, due out later this year, CA said.

CA released its results after the markets closed. The company's shares ended trading Thursday at $27, down 2.48 percent from Wednesday's market close.

CA, based in Islandia, New York, can be reached at +1-516-342-5224 or via the Internet at http://www.cai.com/.

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