Computer Associates International Inc. beat Wall Street revenue expectations, posting a 6 percent rise to $813 million for its first fiscal quarter of 2004.
The Islandia, N.Y., company also beat Thomsen First Call earnings-per-share estimates of nine cents a share by posting earnings of 14 cents a share. That, however, was on a non-generally accepted-accounting-principles (GAAP) basis. GAAP earnings were two cents a share. CA had expected a GAAP loss of between three-to-four cents a share.
"We were especially pleased to achieve GAAP profitability earlier than expected," said Sanjay Kumar, CA chairman and CEO, in CAs earnings call this afternoon. CA lost 11 cents a share in the same quarter last year.
CA posted a net income of $10 million, compared to a loss last year in the same quarter of $65 million.
Kumar, upbeat with the news on top of last weeks CA World user conference in Las Vegas, said that CA customers believe the company is moving in the right direction, as the quarterly numbers attest.
"Customers are looking for strategic partners to help develop solutions to real business problems. Customers are responding to our vision of On Demand Computing. They understand management is key to make it work for them," said Kumar.
CA in fact saw its greatest "traction" in the quarter in its enterprise management software, Kumar said.
"Part of it is competitive: others dont have the strength to survive in this marketplace with customers consolidating the number of partnerships they have. Then there is the technology: although our vision for On Demand Computing is new, we are coming into our sweet spot with (it). We hope to use that to bootstrap ourselves in other markets," explained Kumar of the uptick.
Kumar also cited new marketshare numbers from International Data Corp. in Framingham that give CA the number one position for application performance management.
During the first quarter, CA generated $387 in deferred subscription revenue, representing a 16 percent increase over the same quarter last year. Kumar said it was CAs fourth quarter in a row that CA exceeded annualized deferred subscription revenue.
CAs move to FlexSelect licensing, which emphasizes shorter term customer commitment and more licensing options for CA products, also plays well in the current IT spending environment, Kumar said. Some 50 percent of CAs license revenues were from subscriptions, compared to 41 percent in the same quarter one year ago.
Geographically, North America saw the strongest demand from customers, representing 60 percent of CA revenues for the quarter.
CA forecast revenues for its second fiscal quarter of 2004 to be in the range of $805 to $825 million, and full year revenues to be between $3.275 and $3.425 billion. It expects to generate GAAP earnings per share of one to three cents for the second quarter and seven to 12 cents for the full year.