CA net loss narrows

Sanjay Kumar

Computer Associates has announced that its fiscal third-quarter net loss narrowed and it expects to report a profit sometime in fiscal 2003. “We clearly saw a steady quarter,” chief executive Sanjay Kumar told analysts during a conference call. “December was a good month for us, and a strong month. But we did not see any massive spending burst on the part of customers.”

Under generally accepted accounting principles (GAAP), the world’s No 4 software maker posted a net loss of $231 million, or 40 cents a share, compared with a net loss of $342 million, or 59 cents a share, in the year-ago quarter. Revenues dropped to $749 million from $783 million last year. But the company said last year’s revenues were helped by a large deal that paid upfront.

The company is trying to phase out its dependency on large deals that are paid for all at once and replace them with deals whose payments are spread over the life of the contract. The company said its average deal size this quarter fell to $280,000 from the previous quarter’s $295,000 and the number of deals, were up 25 percent to 26 percent from last year.

For the fiscal fourth quarter, ending March 31, Kumar said he expects results to be about the same as the fiscal third quarter, with a pro forma operating profit of 72 cents on pro forma revenues of $1.470 billion. Under GAAP, the company expects to post an operating loss between 4 cents and 5 cents a share, on revenues of $770 million.

Kumar said he expects the company to see a profit, under GAAP standards, sometime in fiscal 2003, beginning April 1.

“Overall I think it was a very solid quarter,” John McPeake, Prudential analyst, said. “It’s a combination of strength and the underlying mainframe platform.”