CA to miss consensus estimates for second straight quarter

2 min read

Computer Associates (NYSE: CA) sees second quarter earnings below the already-lowered consensus analyst estimate.

After market close Tuesday, the business software vendor said fiscal second quarter earnings will range between 50 cents and 54 cents, not counting amortization. During its first quarter conference call a few months ago, CA executives told analysts to expect earnings in the high 50-cent range.

First Call's survey of 19 analysts resulted in a consensus forecast of 56 cents per share share for the quarter ended Sept. 30, with individual estimates ranging between 50 and 59 cents. Prior to a warning in July, First Call was predicting second quarter earnings of 64 cents per share.

Zack's Investment Research polled 20 analysts to produce a consensus prediction of 57 cents per share. According to Zack's, at least 13 analysts expected CA to earn 55 cents or more per share.

Second quarter revenue will be $1.67 billion to $1.7 billion, CA said. At the time of its July caution, the company expected second quarter revenue of roughly $1.92 billion.

Despite missing consensus predictions and its own previously stated expectations, the company is "very pleased with our performance given the current business environment," president and CEO Sanjay Kumar said in a statement.

Contract value rose about $400 million from the first quarter, to between $1.705 billion and $1.735 billion, Kumar said.

Tuesday's announcement marks CA's second quarterly letdown in as many quarters. CA and other large vendors of mainframe software posted disappointing first quarter results, with the companies reporting reluctance from customers waiting to hear about changes in IBM's System/390 offerings.

IBM today launched a revamped server product line, including mainframes repackaged as powerful e-commerce servers.

Shares of Computer Associates closed Tuesday's regular trading at 24.4375, down 0.4375 for the session.

• CA announced restructuring, ASP spin-off
• CA sees sluggish growth in second quarter too>