) reported first-quarter 2014 adjusted earnings per share of 77
cents, ahead of the Zacks Consensus Estimate of 70 cents.
Total revenue reported in the first quarter of 2014 was $1.13
billion, down 1.5% from $1.15 billion reported in the year-ago
quarter. When adjusted for currency, revenues declined 1.0% year
over year. This was due to a decline in Mainframe Solutions and
the Enterprise solutions business.
The company's Mainframe revenues and Enterprise Solutions
revenues declined by 1.4% and 11.0%, respectively, but the
Services revenues grew 7.7%. Although the company witnesses some
good business opportunity in the Enterprise segment, but the
transaction sizes were much smaller.
The company witnessed total bookings of $824.0 million, up
49.0% on a reported basis. North American bookings were $423.0
million, up 29.8% year over year on a reported basis.
International bookings for the company were $401.0 million up
76.7% from the year-ago quarter. The company witnessed an
increase in the weighted average duration of subscription and
maintenance bookings, which stood at 3.10 years, up from 2.79
years in the year-ago quarter.
Moreover, the company executed a total of nine license
agreements having an incremental contract value in excess of
$10.0 million each, resulting in an aggregate total contract
value of $323 million.
Total operating expenses for the quarter $900.0 million up
17.8% compared to the year ago period, mainly due to product
development cost and other gains. Moreover, the pre tax margin
for the reported quarter was 19.2% down from 32.3% in the
On a GAAP basis, net income was $335.0 million or 73 cents per
share versus $240.0 million or 51 cents per share in the year-ago
quarter. Excluding special items, such as software amortization,
intangible amortization, restructuring and other and hedging
gains/losses, but including stock-based compensation expenses,
non-GAAP earnings in the first quarter stood at 77 cents per
share versus 60 cents in the prior-year quarter.
Balance Sheet, Cash Flow & Share
CA generated $11.0 million cash from operating activities,
down from $570 million, in the previous quarter. Cash, cash
equivalents and investments came in at $2.46 billion, down from
$2.78 billion, reported in the previous quarter. The company's
total outstanding debt was $1.29 billion, flat sequentially.
Moreover, during the reported quarter, CA repurchased around 2
million shares for $53.0 million.
For fiscal 2014, the company expects total revenue to decline in
the range of 4.0% to 2.0% to reach a level of $4.39 billion to
$4.38 billion. CA expects growth in non-GAAP earnings per share
from continuing operations to decline in the range of
16.0%-20.0%, amounting to $960.0 billion to $1.04 billion. Cash
flow from operations is expected in the range of $960 million to
$1.04 billion. While the non-GAAP earnings per share of $2.90 to
CA Inc. reported mixed first-quarter results, with bottom-line
exceeding the Zacks Consensus Estimate while revenues declining
on a year-over-year basis. Most of CA's revenue-generating
segments were adversely affected during the reported quarter,
with the exception of services revenues which increased modestly.
Apart from this, cash position declined sequentially. The
company's guidance for fiscal 2014 appears to be modest.
However, we are positive about CA Inc's increased cloud
exposure. Decent renewal rate, modest cash position and share
repurchase also appear encouraging. This apart, the bookings
growth for the company is also robust, supported by both North
American and International bookings. Moreover, the company is
also witnessed an increase in license win. On the other hand,
increasing competition and exposure to Europe remain
CA currently has a Zacks Rank #1 (Strong Buy).
Investors can also consider other stocks in the technology
industry that are currently performing well such as
Aspen Tech Inc.
Western Digital Corp.
). While Aspen and SanDisk carry a Zacks Rank #1 (Strong Buy),
Western Digital holds a Zacks Rank #2 (Buy).
ASPEN TECH INC (AZPN): Free Stock Analysis
CA INC (CA): Free Stock Analysis Report
SANDISK CORP (SNDK): Free Stock Analysis
WESTERN DIGITAL (WDC): Free Stock Analysis
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