CA Tech Q3 Profit Falls, Yet Tops Estimates; Stock Up

(RTTNews) - Software maker CA Technologies (CA) Tuesday reported a decline in third-quarter profit, hurt by lower margins and weak revenues from Enterprise Solutions. Nonetheless, excluding one-time amortization costs and tax rate adjustments, earnings topped Wall Street estimates and revenue surpassed expectations.

CA again lifted its earnings and revenue outlook for 2014. Following the announcement, CA shares touched a new high in a year - gaining 7.4 percent at $36.80 in after-hours trade on the Nasdaq.

"CA Technologies delivered another solid performance in the third quarter," said CEO Mike Gregoire. "We outperformed on revenue and are pleased with our renewals business and disciplined approach to cost control."

"Based on our results so far this year, we expect our fiscal year 2015 revenue growth rate and non-GAAP operating margin to be similar to fiscal year 2014," added Gregoire.

Islandia, New York-based CA Technologies' posted third-quarter net income of $232 million or $0.51 per share, compared with $251 million or $0.55 per share last year.

Results for the quarter included, among other items, favorable tax rate adjustments of $0.13 per share and total amortization charges of $0.15 per share.

Excluding items, adjusted earnings for the quarter were higher at $379 million or $0.84 per share, compared with $286 million or $0.63 per share a year ago.

On average, 11 analysts polled by Thomson Reuters estimated earnings of $0.71 per share for the quarter. Analysts' estimates typically exclude special items.

CA Technologies, which competes with rivals such as BMC Software and Hewlett-Packard, said revenues for the quarter slid 3 percent to $1.16 billion from $1.2 billion in the prior year. Analysts had a consensus revenue estimate of $1.13 billion for the quarter.

Among segments, declines were seen at Enterprise Solutions and Services businesses, while Mainframe Solutions were flat.

Operating margin for the quarter declined to 29 percent from 31 percent a year ago.

The company's total bookings for the quarter climbed 27 percent from last year to $1.6 billion. Total revenue backlog at the end of the quarter was $7.6 billion, up 2 percent from last year.

For fiscal 2014, the company now expects net earnings of $2.01 to $2.08 per share, adjusted earnings of $3.05 to $3.12 per share and revenues of $4.52 billion to $4.57 billion.

The company earlier expected net earnings of $1.92 to $1.98 per share, adjusted earnings of $2.96 to $3.03 per share, and revenue of $4.47 billion to $4.52 billion for 2014.

Analysts currently expect earnings of $3.02 per share on revenues of $4.50 billion for the year.

Additionally, CA said that Adam Elster, who led the Mainframe and Customer Success group for the past two years, has been named executive vice president and group executive, Worldwide Sales and Services, effective immediately. He replaces George Fischer, who is leaving after two decades at the company.

CA stock closed Tuesday at $34.26, down $0.17 or 0.49%, on a volume of 4 million shares. In after hours, the share gained $2.54 or 7.41% at $36.80. In the past year, the stock has traded in the range of $23.98 - $34.61.