CA returns to profitability

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CA returns to profitability

Computer Associates International has returned to profitability in its most recent quarter, reporting better-than-expected revenue and income gains.

Strong sales and internal cost-cutting helped the company get out of the red sooner than expected, said chairman and chief executive officer Sanjay Kumar.

Revenue for the quarter ending 30 June, the first of CA's financial year, was $813m, up 6% from $765m for the same period last year. CA's net income was $10m, against a $65m loss last year.

CA has been pushing its customers to purchase its software through short-term subscription contracts rather than one-time licensing fees. The company's average contract lasts 2.85 years, and its backlog of contracted but not yet booked revenue totals $3.8bn.

Because of that shift, CA's revenue from subscription fees grew from $314m in last year's first quarter to $449m for the quarter just ended. Non-subscription software fees, maintenance, financial and professional services revenue all dropped year on year.

CA hopes to reverse the downward trend of its services revenue with a new organisation, CA Technology Services, formed in April. The group focuses exclusively on supporting CA's own products.

Stacy Cowley writes for IDG News Service


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