CA Technologies Q3 Profit Declines, But Lifts 2015 Earnings Outlook

(RTTNews) - Information technology management software maker CA Technologies, Inc. (CA) on Tuesday reported a 4 percent decline in profit for the third quarter from last year on lower subscription and maintenance revenues. Looking ahead to fiscal 2015, the company raised its earnings outlook and affirmed its revenue forecast.

Mike Gregoire, Chief Executive Officer of CA Technologies, said, "Overall third quarter results provide further evidence that the strategy we put in place and our focus on rigorous execution continue to pay off. Although we saw a decline in third quarter sales, we are on track for the full year."

For the third quarter, the New York-based company's net income declined to $222 million or $0.50 per share from $232 million or $0.51 per share in the year-ago quarter.

Adjusted income from continuing operations were $297 million or $0.67 per share, compared to $366 million or $0.81 per share in the prior-year period. On average, twelve analysts polled by Thomson Reuters expected the company to report earnings per share of $0.60 for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter decreased 3 percent and 1 percent on constant currency to $1.09 billion from $1.13 billion in the year-ago quarter. Analysts had a consensus revenue estimate of $1.09 billion for the quarter.

The company attributed the decline in total revenue to a decrease in subscription and maintenance revenue. In addition, the company recorded an unfavorable foreign exchange effect of $28 million during the quarter.

Total bookings for the quarter fell 32 percent to $1.07 billion from $1.57 billion last year, mainly due to a year-over-year decrease in renewals from the timing of the renewal portfolio within subscription and maintenance bookings. In addition, the year-ago period's figures included a four-year contract renewal with a large systems integrator for more than $300 million.

Total revenue backlog declined 11 percent from the year-ago period to $6.69 billion.

Looking ahead to fiscal 2015, CA Technologies affirmed its outlook for total revenue to decrease in a range of minus 2 percent to minus 1 percent in constant currency. At December 31, 2014 exchange rates, this translates to reported revenue of $4.26 billion to $4.30 billion. Analysts have a consensus revenue estimate of $4.31 billion.

The company now forecasts fiscal 2015 earnings per share from continuing operations of $1.76 to $1.83, representing minus 7 percent to minus 4 percent in constant currency, and adjusted earnings per share from continuing operations of $2.45 to $2.52, representing minus 17 percent to minus 14 percent in constant currency.

Earlier, the company forecast fiscal 2015 earnings per share from continuing operations to decrease in a range of minus 12 percent to minus 8 percent in constant currency, and adjusted earnings per share from continuing operations to decrease minus 20 percent to minus 18 percent in constant currency.

Street expects the company to report earnings of $2.44 per share for the year.

CA Technologies said it is on track to achieving medium-term goals, while it does not expect fiscal 2016 total revenue to grow in constant currency.

CA closed Tuesday's regular trading session at $31.67, up $0.31 or 0.99 percent on a volume of 4.98 million shares. In after-hours, the stock declined $0.43 or 1.36 percent to $31.24.