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Computer Associates beats estimates

The network management software firm bests estimates by 3 cents, reporting strong third-quarter growth from software sales and professional services.

Computer Associates beat Wall Street estimates by three cents today as the network management software firm reported strong third-quarter growth from software sales and professional services.

For the third quarter ended December 31, Computer Associates posted income of $354.6 million, or 64 cents a share, compared with $339.9 million, or 60 cents a share last year. Analysts had estimated the company would earn 61 cents a share, according to First Call.

Third-quarter revenue rose 10 percent to $1.36 billion, from $1.24 billion the previous year.

Company executives said client/server software sales rose 31 percent from the same period last year. Revenue from professional services, increased 97 percent to $77 million, compared to the same time last year. International revenue also increased 19 percent, executives said.

Computer Associates has sought to demonstrate that its business is still expanding despite its warning in July that sales and earnings would slow, partly because Asia's slump is causing corporate customers to delay purchases. Since then, the company has unveiled new technology that lets computers predict future events and has been building its services unit through several small acquisitions.

"Folks have started to get back on the CA bandwagon," said First Albany analyst Damian Rinaldi, who has a "neutral" rating on the company. CA has been trying to convey that "they're on track with the results."

Computer Associates unveiled software last month based on so-called neural networks, a technology that patterns itself on the decision-making ability of the human brain. Software products historically haven't had the ability to learn from events, make an evaluation and then reach a conclusion or take an action.

Bloomberg contributed to this report.