This is a summary of the first quarter fiscal 2009 earnings call conducted by CA, Inc. (CA) on July 31, 2008.
Management:
CEO & Director: John A.C. Swainson
CFO & Executive VP: Nancy E. Cooper
Vice President, Investor Relations: Joseph Doncheski
Key Investor Issues:
- Net income for the latest quarter was $200 million, or 37 cents a share, compared with $129 million, or 24 cents a share, a year earlier.
- Excluding items, per-share earnings rose to 40 cents from 29 cents.
- Revenue rose 6% to $1.09 billion.
- CA backed its fiscal 2009 earnings outlook of $1.45 to $1.52 a share on revenue of $4.5 billion to $4.6 billion.
- Revenue is expected to decline between $4.5 billion and $4.6 billion.
First Quarter Highlights:
The first quarter was the company’s seventh consecutive quarter of solid performance and CA re-affirmed its outlook for fiscal year 2009.
Sales of security and infrastructure management solutions excelled during the quarter.
In the security space CA saw strong demand for its identify and access management solutions while in the infrastructure area the company saw increased demand for its network systems management offerings, eHealth and SPECTRUM. CA also saw significant traction in the mainframe database tools market.
Revenue was up 6%, which was flat in constant currency terms but was in line with the company’s expectations.
- Non-GAAP earnings per share growth year-over-year were 38% driven in part by the long term focus on business process improvements and expense management.
- Cash flow from operations was $54 million which was the best performance in a first quarter in three years.
CA was named the leader in data center automation solutions in The Forrester Wave Data Center Automation Research Report that was released last April.
CA is identified by Gardner as the worldwide market leading vendor in asset management and job scheduling based on total software revenue. This recognition which is contained in a report released in June marks the sixth consecutive year that CA has been ranked as the worldwide overall market leader in IT asset management.
Gardner also identifies CA as the market share leader in user provisioning in 2007 and the market leader in web access management with nearly a third of the market. CA’s clarity project and portfolio management product is sought in the leader’s quadrant of Gardner’s Magic Quadrant for that category.
With more than $500,000,000 dedicated annually to research and development CA is continuing to innovate and deliver the solutions that help make customers’ IT systems a competitive advantage. Last June CA announced eight new and updated solutions which included products to enable customers to more easily manage compliance and risk from a central location across mainframe and distributed computing environment.
One of the highlights of the June launch was a rollout of the new version of the Advanced Systems Management product.
This product increases the company’s Unicenter Network Systems Management product’s capability to enable customers to expand their management and virtual environment. Industry analysts from Enterprise Management Associates earlier this year put CA in the first team for virtual systems management.
Total bookings were $1.03 billion in the quarter an increase of 15% from $895 million in the prior year.
The company has modified its bookings disclosure to include all committed maintenance contracts which is a more relevant measure of the company’s committed future revenue generating activities.
Strength in bookings was driven by continued sales execution in AMEA and North America and strength in new license sales consisting of both new products and related maintenance as well as new mainframe capacity. CA estimates about one-third of the bookings in the quarter were new license sales.
The weighted average life of subscription and maintenance bookings in the quarter was 3.37 years as compared to 2.95 years in the prior year.
