CA Profit Matches Estimates; Company Lowers Full-Year Forecast

Wednesday, 23 May 2007 | 5:11 PM ET

CA reported fiscal fourth-quarter earnings of 20 cents a share on a topline of $1.005 billion, both figures roughly in line with estimates. But the company's shares lost ground as it issued a forecast for fiscal 2008 that fell below Wall Street targets.

On average, analysts surveyed by Thomson Financial forecast a quarterly profit of 20 cents a share on revenue of $1 billion. In the same period last year, CA earned 14 cents a share and reported revenue of $947 million.

CA credited the most recent quarter's sales increase to growth in subscription revenue and professional services, which was partially offset by lower software fees and other revenue and maintenance and financing fee revenue as CA continues to transition from its prior business model.

Including charges, CA posted a loss of $20 million, or 4 cents a share, compared with a year-earlier loss of $41 million, or 7 cents per share.

The latest quarter includes $100 million in restructuring charges, or about five times the year-ago amount of $22 million. $71 million of the amount booked is related to severance costs, and $8 million is related to the closure of facilities.

Looking ahead to fiscal 2008, the company sees revenue from $4.05 billion to $4.10 billion, or up 3 to 4% on a constant currency basis. It put earnings per share before items at 94 cents to 98 cents.

Analysts on average expected revenue of $4.12 billion and earnings per share before items of $1.04.

In after-hours trading, shares of the company fell as much as 7.2%. They lost about 1% before that in regular trading Wednesday .

Buyback in the Works

CA said its board authorized the repurchase of up to $500 million in common stock.

The company plans to finance the accelerated share repurchase transaction with existing cash.

During its fiscal year ended in March, the company repurchased about 51 million shares for about $1.2 billion.

CA has about 527.4 million shares outstanding.

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