CA suffers fall in revenue

Computer Associates International has posted revenue of $772m (£533m), up from $730m (£504m), for its fourth quarter. However,...

Computer Associates International has posted revenue of $772m (£533m), up from $730m (£504m), for its fourth quarter. However, its revenue for its 2002 financial year is $2.96bn (£2bn), compared with $4.19bn (£2.9bn) for the previous year.

Its net loss for the quarter, using US accounting principles (GAAP), was $238m (£168m), down from $410m (£283), in last year's fourth quarter. Excluding costs of past acquisitions and special charges, the company posted a net operating income of $3m and broke even in terms of diluted operating earnings per share.

The 2001 revenue figure was restated down, but only slightly, from $4.198bn. The company's net loss for the year, based on GAAP, grew from $591m (£408m) in 2001 to $1.1bn (£760m) in 2002.

Excluding continuing costs of past acquisitions, as well as one-time losses and gains, CA had a $265m (£183m) net operating loss.

Because of CA's change in its business model in 2000, its GAAP 2001 fiscal year results include quarters calculated under both the old and new models and are not directly comparable to its 2002 results, which include operations only under the new model.

To reconcile the two sets of figures, CA offered in its supplemental information pro forma calculations showing revenue of $5.8bn (£4bn) for 2002 and $5.56bn (£3.8bn) in 2001. The pro forma numbers factor in a portion of revenue CA booked up front in previous years as contracts were signed.

CA also offered a pro forma analysis of its quarterly results in its supplemental information, but did not include the pro forma figures in its financial results press release, as it has in previous quarters.

CA's accounting practices have made it the subject of federal probes by the US Securities and Exchange Commission (SEC) and Department of Justice (DOJ), along with several class-action lawsuits.

CA chief executive officer Sanjay Kumar briefly addressed the issue of those investigations following CA's financial release. The company continues to co-operate voluntarily with the SEC and DOJ and maintains its belief that its accounting complies with all applicable laws and regulations.

"In a difficult environment, we thought the company performed really well," he said, citing both the "distractions" CA has faced and the depressed IT market.

As in past quarters, sales of enterprise management software drove CA's revenue, accounting for 43% of its fourth-quarter total.

CA's professional services revenue continued to dwindle, dropping from $105m (£72.5m) in the year-earlier quarter to $73m (£50.5m) in 2002's fourth quarter, with increased product revenue filling the gap.

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