CA Posts Narrower Q4 Loss, Adjusted EPS In-line, Shares Drop on Guidance

CA Inc. reported a Q4 net loss of $20 million ($0.04/share), compared to -$0.07/share last year. Adjusted EPS of $0.20 matched analysts' average estimate, as did revenue of $1.01b. Fiscal '08 guidance for EPS of $0.94 - $0.98 on sales of $4.05b - $4.1b, was below analysts' average forecast of $1.04/share on revenue of $4.12b. Shares of CA fell 6.6% to $26.00 in extended activity on volume of 406,000, after losing 1% to $27.84 during normal trading. Higher revenue from subscriptions and professional services offset weakness in software fees and maintenance revenues. In a press release, CA said it repurchased approximately 51 million shares in FY'07 at an aggregate cost of about $1.2b. It plans to accelerate the repurchase of up to $500m in common stock. Coverage of its earnings by Bloomberg, mentions among 13 analysts covering CA, none rate it "buy", while 11 rate it "hold" and two "sell."

Sources: Computer Associates F4Q07 Earnings Call Transcript, Press release, Bloomberg, MarketWatch, Reuters
Commentary: CA: Cost Cuts Could Top Estimates • Is CA Inc Really Back From the Brink? • The Impact Of Stock Options Backdating On Corporate Cash
Stocks/ETFs to watch: CA, Inc. (CA). Competitors: BMC Software Inc. (BCM), EMC Corp. (EMC), International Business Machines Corp. (IBM). ETFs: Software HOLDRs (SWH), iShares S&P GSTI Software (IGV)

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