CA posts $87 million loss in Q2

FRAMINGHAM (10/22/2003) - Systems management software maker Computer Associates International Inc. Wednesday reported a loss of US$87 million on revenue of $833 million for its second quarter of fiscal 2004. In comparison, it lost $52 million on revenue of $772 million in the same quarter last year.

The figures released Wednesday reflect $113 million in charges to settle litigation. The Islandia, N.Y.-based company reports its revenue on a quarterly basis over the life of a contract and recorded new deferred subscription revenue of $405 million, with contracts running for nearly three years on average.

"This was another good quarter for CA as we exceeded our revenue and operating earnings projections," said Sanjay Kumar, CA's chairman and CEO, in a statement. "In addition, we took action to put two longstanding legal issues behind us. Contract signings for the quarter were higher than last year, led primarily by the strength of our North American business. Additionally, our channel business is beginning to make progress, reflecting our efforts to improve relationships with partners through enhanced training, support and incentive programs."

Kumar also addressed the departure of Chief Financial Officer Ira Zar and two other financial executives earlier this month.

"Earlier this month, the audit committee of the board of directors issued preliminary findings of its independent investigation, and in light of what they found we asked three executives to resign," Kumar said. "The findings were obviously disturbing to all of us and it has been a painful time for the company. The committee and the government investigations are serious matters that will continue to get whatever time and attention they demand. At the same time, we will not lose focus on our customers or our business, and we will not waver in our determination to earn investor confidence every day by setting and meeting the highest standards in corporate governance."

The company said it expects to book annual revenue of up to $3.4 billion.

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