CA Beats on EPS, Revs Lag Y/Y - Analyst Blog
27 Luglio 2012 - 3:58PM
Zacks
CA Inc. (CA) reported first quarter 2013
adjusted earnings per share (EPS) of 60 cents, ahead of the Zacks
Consensus Estimate of 56 cents.
Revenue
Total revenue in the reported quarter came in at $1.145 billion,
down 1.5% from $1.163 billion in the year-ago quarter. On a
reported basis, revenue from existing products and services reduced
by 2 percentage points, whereas the revenue generated from acquired
technologies slightly below 100 basis points.
Region wise, 63.0% of the company’s revenue in the first quarter
came from North America while the remaining 37.0% came from
International operations.
Revenue Segments
As per revenue segments, Mainframe Solutions
revenue was $628 million, down 3.0% year over year.
Enterprise Solutions revenue was $426 million, up
2.0% year over year. Services revenue was up 4.0%
year over year to $91 million.
Bookings
The company witnessed total bookings of $553 million in the
first quarter, down 36.0% year over year, primarily due to a
decrease in renewals. The company had previously stated that it
expects fiscal year 2013 renewal portfolio to decline in the single
digit range annually, with the first quarter being the low
point.
Moreover, North America bookings were $326.0 million, down 39.0%
year over year while international bookings were down 31.0% year
over year to $227 million.
Operating Results
Income from continuing operation was $240.0 million, up 5.3%
from $228.0 million in the year-ago quarter, aided by better cost
management by the company.
Net income on a GAAP basis in the reported quarter was 51 cents
per share versus 48 cents per share in the year-ago quarter.
Excluding special items, such as software amortization, intangible
amortization, restructuring and other and hedging gains/losses, but
including the stock-based compensation expenses, non-GAAP net
income in the first quarter stood at 60 cents per share versus 51
cents in the prior-year quarter.
Balance Sheet and Cash Flow
CA Inc. generated cash flow from continuing operations of $183.0
million compared with $143.0 million in the year-ago quarter. Cash,
cash equivalents and marketable securities were $2.5 billion versus
$2.7 billion in the previous quarter.
Guidance
For fiscal year 2013, the company expects revenue growth in a
range of 1.0% to 2.0%. GAAP diluted earnings per share from
continuing operations growth in constant currency in a range of
12.0% to 14.0%.
Non-GAAP diluted earnings per share from continuing operations
are expected to grow in the 10.0% to 12.0% range. This translates
to reported non-GAAP diluted earnings per share of $2.45 to $2.50
and cash flow from continuing operations of $1.54 billion to $1.57
billion.
Our Take
CA Inc. posted decent first quarter results exceeding the
earnings estimates, although revenue declined on a year-over-year
basis. This apart, the company witnessed decline in bookings.
However, the product demand trend was moderate in the reported
quarter. This apart, the company also witnessed lower income from
continuing operation.
We believe that the company provided decent fiscal 2013
guidance. However, we are concerned about intense competition in
the software & cloud computing space from big players such as
IBM Corp. (IBM) and Hewlett-Packard
Company (HPQ). In addition, its high debt balance,
reduction in tech spending by government agencies and European
exposure may pose some challenges going forward.
The company has a short-term Zacks #3 Rank. (Hold rating).
CA INC (CA): Free Stock Analysis Report
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