CA Technologies Q4 Profit Down, Yet Tops View; Warns On FY15 Results

(RTTNews) - Application software solutions provider CA Technologies (CA) reported Thursday a sharp decline in fourth-quarter profit, hurt by tax charge as well as lower revenues. Adjusted earnings, however, topped analysts' estimates. Further, for fiscal 2015, the company provided a cautious outlook for earnings, which is below market view.

In pre-market activity, CA shares are gaining $0.16 or 0.55 percent, and trading at $30.07.

For the fourth quarter, the Islandia, New York-based company's net income plunged to $107 million or $0.24 per share from $242 million or $0.53 per share in the previous year. Earninsg from continuing operations declined 53 percent year-over-year to $104 million or $0.23 per share.

Adjusted earnings from continuing operations, which excluded certain items, were $0.61, while the company posted $0.67 per share last year. On average, seven analysts polled by Thomson Reuters expected the company to earn $0.58 per share for the quarter. Analysts' estimates typically exclude special items.

The company noted that reported earnings per share were negatively affected by $0.13 due to a higher effective tax rate, while adjusted earnings per share were positively affected by $0.03 due to a lower effective tax rate.

Total revenues for the quarter declined 3 percent to $1.11 billion from $1.14 billion a year ago primarily attributable to a decrease in Enterprise Solutions revenues. Analysts estimated revenues of $1.09 billion for the quarter.

Total bookings declined 15 percent year-over-year to $1.24 billion, with a 21 percent decline in North America bookings, while international bookings edged down 1 percent.

Total revenue backlog declined 1 percent from last year to $7.70 billion.

Looking ahead for fiscal 2015, the company expects reported earnings per share from continuing operations to be in the range of $1.79 to $1.86, a decrease of 8 percent to 12 percent in constant currency. Adjusted earnings per share from continuing operations are expected to be $2.45 to $2.52 per share, a decrease of 19 percent to 21 percent in constant currency.

Total revenues for the fiscal are anticipated to be between $4.43 billion and $4.49 billion, down 1 percent to 2 percent in constant currency.

Street analysts expect the company to report earnings of $2.56 per share, on revenues of $4.47 billion for the year.

The company expects operating margin of 28 percent and adjusted operating margin of 37 percent.

Chief Executive Officer Mike Gregoire said, "Revenue is still not where we would like it to be, and we will not be satisfied until we are driving meaningful growth for our company and our shareholders."

The company further said its Board of Directors on Wednesday approved a stock repurchase program that authorized the company to acquire up to $1 billion of its common stock. The company expects to complete the program in approximately three years.