By Debbie Cai
CA Inc.'s (CA) fiscal fourth-quarter earnings rose 15% as the
business-software maker posted a decline in expenses and benefited
from a comparison with a year-earlier period that included higher
income taxes.
The company also unveiled a plan to cut about 1,200 staff
globally and consolidate development sites. It has about 13,600
employees.
Shares slid 3.9% to $36.69 in after-hours trading as CA gave a
downbeat earnings outlook for the new year.
For fiscal 2014, the company expects adjusted earnings to
decline 4% to 7% in constant currency to about $2.35 to $2.43 a
share with revenue decreasing between 2% and 4% to about $4.43
billion to $4.52 billion. Analysts surveyed by Thomson Reuters had
predicted flat per-share earnings of $2.53 and revenue of $4.67
billion.
CA, a manufacturer of software for mainframes and computer
systems, has now seen sales decline for four straight quarters. The
Islandia, N.Y., company has blamed challenges in its sales force
along with broader macroeconomic malaise for weakening earnings
estimates.
Newly installed Chief Executive Michael P. Gregoire said he
knows the company can do better to drive results and is initiating
a plan--resulting in a roughly $150 million charge for fiscal
2014--to rebalance resources and drive product development and
sales.
The plan includes shedding about 1,200 employees world-wide and
consolidating sites into centralized development hubs. A majority
of the personnel actions are expected to be completed by the end of
the first quarter of fiscal 2014. CA said it expects to backfill a
majority of the positions over the next 12 months with new
employees. The company also plans to further streamline its sales
structure to eliminate overlays while maintaining its focus on the
existing enterprise and enterprise growth customer segments.
In the latest period, bookings slipped 5.1% to $1.46
billion.
For the quarter ended March 31, CA reported a profit of $242
million, or 53 cents a share, up from $211 million, or 45 cents a
share, a year earlier. Excluding stock-based compensation,
amortization and other items, earnings from continuing operations
grew to 68 cents a share from 56 cents a share. Revenue declined
3.1% to $1.15 billion.
Analysts polled by Thomson Reuters were looking for a per-share
profit of 55 cents on revenue of $1.14 billion.
Subscription and maintenance revenue--contributing the lion's
share of the top line--slid 3.4%. Professional services revenue was
6.5% higher, while software fees and other revenue fell 8.3%.
Total expenses declined 1.1% to $877 million.
In the latest period, income-tax expenses dropped 73% to $21
million.
The stock is up 26% so far this year.
Write to Debbie Cai at debbie.cai@dowjones.com
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