) reported third-quarter 2013 adjusted earnings per share (EPS)
of 61 cents, ahead of the Zacks Consensus Estimate of 57 cents.
Total revenues in the reported quarter were $1.19 billion, down
5.0% from $1.26 billion in the year-ago quarter. When adjusted
for currency, revenue declined 4.0% year over year. This was due
to a decline in Mainframe Solutions.
Mainframe Solutions generated revenue of $622.0 million, down
9.0% year over year. Enterprise Solutions revenue was $476.0
million, flat year over year. Services revenue was down 6.0% year
over year to $97.0 million.
The company witnessed total bookings of $1.261 billion, down 2.0%
on a reported basis. The single license payment in the third
quarter of fiscal 2012 resulted in a decline of 3.0 percentage
points to fiscal year 2013 total bookings.
North America bookings were $685 million, declining 11.0% on a
reported basis. The single license payment in the third quarter
of fiscal year 2012, contributed 5.0% to the decline from the
year ago period.
International bookings stood at $576 million, improving 11.0% on
a reported basis.
Reported operating income was $370.0 million, down 10.0 % from
the year-ago quarter, due to inefficient cost management.
On a GAAP basis, net income was 55 cents per share versus 54
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
the stock-based compensation expenses, non-GAAP net income in the
third quarter stood at 61 cents per share versus 62 cents in the
Balance Sheet and Cash Flow
CA generated cash flow from continuing operations of $566
million, up 43% on a reported basis. The improvement in cash flow
can be attributed to a $178.0 million increase in cash
collections, including a single installment payment of $150
million. Cash, cash equivalents and investments was $2.55
The company expects total revenue to be in a range of negative
3.0% to negative 1.0%. CA expects growth in non-GAAP earnings per
share from continuing operations to be in the range of
6.0%-10.0%, amounting to $2.36 to $2.44.
CA Inc. delivered modest third-quarter results with the bottom
line surpassing the Zacks Consensus Estimate. A decline in
business revenue led to a year-over-year drop in total revenues.
Lower bookings reflected lackluster demand for CA's products and
solutions. Further, the company's fiscal 2013 results reflect a
However, we are optimistic about the company's increased cloud
exposure, for which it received an accolade from an IT research
firm, IDC. The firm elected CA as the market leader in cloud
systems management. Hence, we expect CA to capitalize on the
growing demand for cloud in the long term. We are also encouraged
by the company's continuous share buyback and dividend payout.
On the flip side, intense competition in the software and cloud
computing space from major players like
), reduction in tech spending and increased exposure to Europe
add to the woes.
Currently, CA has a Zacks Rank #3 (Hold).
Investors should look out for some other stocks that are slated
to report this earnings season with positive Zacks Rank and
Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
Geospace Technologies Corp.
) has a Zacks Rank #2 (Buy) with an ESP of +21.2%.
) has a Zacks Rank #2 (Buy) with an ESP of +350.0%.
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