CA Profit Falls 64 Percent
CA Inc.'s fiscal first-quarter profit fell 64 percent on increased expenses, and the business software maker said it will trim its work force by about 10 percent, or 1,700 positions.
The Islandia-based company, formerly known as Computer Associates, said Monday it expects charges of about $200 million for the restructuring that also includes facilities consolidations and other cost-saving measures.
"We are not satisfied with our cost structure and we are implementing an expense reduction plan to improve the company's efficiency and competitive position," said John Swainson, CA's chief executive. For the quarter ended June 30, CA's earnings dropped to $35 million, or 6 cents per share, from $97 million, or 16 cents per share during the same period last year.
Results included adjustments for restructuring and amortization. Excluding these items, profit totaled $104 million, or 17 cents per share.
Analysts polled by Thomson Financial forecast a profit of 13 cents per share.
Revenue grew 3 percent to $956 million from $927 million during the year-ago quarter, beating analysts' expectations for revenue of $932.8 million.
The company posted a 9 percent increase in expenses from higher personnel costs resulting from recent acquisitions, among other factors.
CA said its June 29 guidance for adjusted earnings of 83 cents per share on revenue of $3.9 billion for fiscal 2007 has not been adjusted to reflect the stock repurchase plan or related financing activities.
Analysts currently are predicting earnings of 82 cents per share on $3.9 billion in revenue for the year.