The software maker reported net income of $155.8 million, or 42 cents a share, up from $119.8 million, or 32 cents a share, reported in the same quarter a year ago. Wall Street was expecting earnings of 39 cents a share, according to First Call.
The company's stock gained 1-1/4 in active trading, up from yesterday's close of 63-1/16. Volume was heavy with nearly 900,000 shares trading hands.
Chuck Raabe, an analyst with Collins & Company, expected "growth across most of their product lines," noting that the company has great opportunities with so many software products, many of which face little competition.
And revenues for the quarter reached $890.7 million compared with $792.1 million a year ago.
Client-server product revenue grew 51 percent on a year-over-year basis and accounted for over 40 percent of total revenue. In addition, the company said it saw improved results from its European operations and is optimistic about future opportunities in those areas, particularly for its Unicenter TNG enterprise management platform.
Meanwhile, the company also noted North America, Latin America and the Asia-Pacific regions continue to show good growth.
"Further progress will require continued improvement in Europe, modest mainframe demand, and ongoing strength in the midrange business, but management's confidence seems to be rising and the sales pipelines sound healthy," said Hugh Shytle, an analyst with Cowen & Company, in a recent report.
He added that CA is uniquely positioned to benefit from the demand for open systems management, particularly on Windows NT.
Other analysts see opportunities ahead as CA offers some core functions of Unicenter as a separately available framework. The company will continue offering its traditional all-in-one package with operations management applications and core framework services. CA will distribute the framework via OEM partners. Richard Scocozza, an analyst with Brown Brothers Harriman, recently raised his short-term target to $74 from $60 and long-term price target to $90 from $72, based on expansion of the market and potential in the systems management software market.
"We believe CA will remain the leader in systems management and momentum will continue to build for Unicenter TNG. We expect the systems management software business to be one of the highest-growth segments in the software industry over the next few years," said Scocozza in a research report.
CA provides database, enterprise management, systems management, and business software applications to Fortune 500 companies, with nearly 95 percent penetration of that elite corporate sector, according to internal estimates.