CA Tech. Q4 Profit Tops View

(RTTNews) - IT management software provider CA Technologies Inc (CA), on Thursday reported an increase in fourth-quarter profit, driven by improved margins, even as revenues slid 6 percent owing to fewer subscriptions and the impact of a stronger dollar. Quarterly earnings topped Wall Street estimates.

The company provided weak guidance for the full year 2016.

CA shares initially slid about 3 percent in after-hours trade on the Nasdaq but pulled back later.

"In fiscal year 2015, we focused our efforts on our go-to-market strategy, introduced new products... however, we still have work to do to drive the kind of growth that our company has the potential to achieve," said CEO Mike Gregoire in a statement.

The New York-based company posted fourth-quarter net earnings of $151 million or $0.34 per share, compared with $107 million or $0.24 per share last year.

Excluding stock-based compensation expense, amortization costs and other items, adjusted earnings for the quarter were $0.56 per share, compared with $0.62 per share a year ago.

On average, 13 analysts polled by Thomson Reuters estimated earnings of $0.50 per share for the quarter. Analysts' estimates typically exclude special items.

Operating margin improved to 21 percent from 17 percent a year ago, mainly driving the results, CA said.

CA said its revenues for the quarter slid to $1.02 billion from $1.08 billion in the prior year.

Twelve analysts had a consensus revenue estimate of $1.04 billion for the quarter.

Revenues were hurt by lower subscription and maintenance business, and there was an unfavorable foreign exchange effect of $53 million, CA said.

The company's revenue in North America edged down 1 percent from a year ago, and international revenue fell 13 percent.

Its bookings at the end of the quarter totaled $1.07 billion, a decline of 12 percent from last year, mainly due to an unfavorable foreign exchange rate and fewer early renewals. Revenue backlog was down 15 percent at $6.53 billion.

For the full year 2016, the company expects adjusted earnings of $2.38 to $2.45 per share, representing an increase of 2 percent to 5 percent in constant currency; and revenues of $3.95 billion to $3.99 billion, implying a drop of 2 percent in constant currency.

Analysts expect earnings of $2.47 per share on revenues of $4.18 billion for the year.

CA closed Thursday at $31.40, down $0.05 or 0.16%, on a volume of 4.3 million shares on the Nasdaq. In after hours, the stock dropped $0.65 or 2.07% at $30.75. In the past year, the stock has trended in the range of $25.25 - $33.42.