CA Inc.'s (CA) fiscal third-quarter earnings rose 32% as the
business-software maker saw revenue growth in each of its three
segments.
Shares surged 18% to $26.92 in after-hours trading as the
company also unveiled a capital allocation program that targets the
return of up to $2.5 billion to shareholders through fiscal year
2014.
"Our third-quarter performance and positive operating momentum
reinforce our belief that we have the right strategic plan in
place," Chief Executive Bill McCracken said.
The capital allocation program includes increasing the annual
dividend to $1 from 20 cents a share and the authorization to
repurchase up to $1.5 billion in common stock, including
approximately $230 million remaining under the company's current
authorization.
CA, which makes software for mainframe and other corporate
computers, has been watching its costs carefully in recent years,
helping it to post a relatively steady operating profit.
For the quarter ended Dec. 31, CA posted a profit of $263
million, or 54 cents a share, up from $200 million, or 39 cents a
share, a year earlier. Excluding amortization expense, stock-based
compensation and other items, earnings rose to 65 cents a share
from 50 cents. Revenue increased 10% to $1.26 billion.
Analysts surveyed by Thomson Reuters expected a per-share profit
of 54 cents on revenue of $1.21 billion.
Operating margin widened to 33% from 29%.
Bookings rose 1%, or 2% on a constant currency basis.
Subscription and maintenance revenue--the largest contributor to
the top line--rose 3.3%, while professional services revenue
increased 17% and software fees and other revenue jumped 88%.
The company also raised its full-year guidance, now projecting
adjusted earnings growth of 11% to 13% in constant currency from
its previous view of 7% to 10% growth. It now sees revenue growth
of 6% in constant currency, from its prior view of 5% to 6%.
-By Nathalie Tadena, Dow Jones Newswires; 212-416-3287; nathalie.tadena@dowjones.com;