CA posts second quarter loss on restitution charges

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CA posts second quarter loss on restitution charges

Computer Associates has reported a 6% increase in revenue during its second fiscal quarter, but posted a $94m (£51m) loss after paying to settle government investigations into the company.

The company recorded $218m in charges to create a restitution fund that would compensate shareholders who were affected by the US government's investigation into accounting improprieties at the management software company.

This fund was also used to "assist the government in obtaining executive disgorgement", CA said, alluding to the departures of several high-profile executives including former chief executive Sanjay Kumar.

CA had warned investors about the charges earlier this month when it updated its second-quarter earnings forecast. At the time, the company said it expected to meet or exceed its earlier target of $830m to $850m in revenue.

The company followed through on that promise by recording $855m in revenue during the quarter which ended on 30 September. This was an increase of 6% over the $803m in revenue recorded during last year's second quarter.

Bookings increased by 70% compared to last year's second quarter to $690m. Services revenue increased by 7% in the quarter as the company improved its execution, it said.

The $94m loss is wider than the $90m loss recorded in last year's second-quarter. However, CA had expected to lose more than that figure. It said it expected to make money in its third quarter. Third-quarter revenue should fall between $850m and $865m, the company said.

Tom Krazit writes for IDG News Service


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