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Computer Associates warns on lower revenue

The software company cuts guidance by up to 5 percent, citing weak performance of the services business.

Management software company Computer Associates International warned investors Thursday that revenue for the first quarter would be lower than expected.

The Islandia, N.Y.-based company reduced revenue guidance for the quarter ended June 30 to between $830 million and $850 million--a reduction of about 3 percent to 5 percent. Previous guidance was from $865 million to $885 million. The company said it expected to meet GAAP and non-GAAP earnings per share guidance of 5 cents to 7 cents per share and 17 cents to 19 cents per share.

Shares dropped 5.62 percent, or $1.46 per share, to $24.54 in trading Thursday but ticked up, 0.24 percent, or 6 cents per share, to $24.60, in after-hours trading.

CA Chief Operating Officer Jeff Clarke cited weak performance of the services business, a higher mix of maintenance in the indirect business and lower subscription revenue for the revised revenue guidance.

CA joins other software makers, PeopleSoft, Siebel Systems and BMC Software, in cutting estimates this month.

"Overall, considering the current industry dynamics, I am satisfied with our performance," Clarke said in a statement. "I am pleased that we will be able to meet earnings guidance as a result of excellent expense controls."

Clarke added that the company expected revenue to grow 5 percent to 8 percent for the current quarter compared with the same period a year ago.

The company will report final results after market close on July 22.