This summary is based on the fourth quarter fiscal 2008 earnings call conducted by CA Inc. (CA) on May 22, 2008.
Management:
CEO: John A Swanson
CFO and EVP: Nancy E Cooper
VP, IR: Joseph Doncheski
Key Investor Issues:
- Full year 2008 revenue rose 8% from $3.943 billion in 2007 to $4.277 billion in 2008.
- Full year GAAP EPS were 93 cents versus 22 cents in fiscal 2007.
- The management projects fiscal 2009 GAAP EPS in the range of $1.28 to $1.35.
Fourth-Quarter Financial Highlights
The total revenue for Q4 was $1.085 billion, an increase of 8% from $1.005 billion in Q4 of 2007.
- In constant currency, this represents an increase of 2%.
- The full year 2008 revenue was $4.277 billion, an increase of 8%, or 4% in constant currency, from $3.943 billion reported in fiscal year 2007.
- The North American revenue rose 2% during the quarter while revenue from international operations firmed 16% or 3% on a constant currency basis, compared with the same period in fiscal 2007.
- The total product and services bookings during the quarter were $1.468 billion. This represents an increase of 30% versus $1.133 billion in the prior year quarter.
- For the full fiscal year 2008, total product and services bookings were $4.537 billion, 15% higher from $3.938 billion in fiscal year 2007.
- The management reported that the company signed 61 license agreements of more than $10 million for a total of $1.4 billion. This is in comparison with 42 license agreements totaling $1.1 billion in 2007.
- The weighted average of direct bookings in fiscal 2008 was 3.22 years versus 3.29 years in 2007.
The total expenses before interest and income taxes were $935 million during the quarter.
- This reflects a decrease of 8% compared with $1.017 billion in the last year quarter.
- The fourth quarter was positively impacted by a decrease in amortization of capitalized software and lower restructuring costs compared with last year’s comparable period.
- The total expenses before interest and income taxes for fiscal 2008 were $3.423 billion, a decrease of 8% versus $3.729 billion in fiscal 2007.
- The full year expenses were positively affected by a decrease in amortization of capitalized softer and lower restructuring costs versus the previous fiscal year.
During the quarter, the GAAP operating income before interest and income taxes was $150 million.
- This reflects an operating margin of 14%, an improvement from the last year period’s operating loss.
- For the full year, GAAP operating income before interest and income taxes was $854 million, representing an operating margin of 20%, a 15% improvement over the prior year period.
The management advised that non-GAAP basis figures exclude purchased software and intangibles amortization and restructuring and other costs.
- The non-GAAP operating for the quarter were $831 million, virtually flat with the $830 million reported in the prior year period.
- Excluding the negative impact of currency, Q4 non-GAAP operating expenses were down 6% year-over-year.
- The non-GAAP operating income before interest and income taxes was $245 million for the quarter. This represents an increase of 45% from the last year period and a non-GAAP operating margin of 23%, being a 6% improvement from Q4 in 2007.
- The management reported that the full year non-GAAP operating expenses were $3.177 billion, a slight increase from $3.160 billion in 2007.
- Excluding the impact of currency, non-GAAP operating expenses dipped 3% year-over-year.
- For the full year, non-GAAP operating income before interest and income taxes was $1.1 billion. This translates to an operating margin of 26%, a 6% improvement year-over-year.
- Excluding the stock based compensation, the full year non-GAAP operating margin was 28%.
The Q4 GAAP income from continuing operation was $71 million or 13 cents per share.
- This is in comparison with a loss of $20 million or (4 cents) per share in the year ago quarter.
- For the full year, GAAP income from continuing operations was $500 million or 93 cents per share versus $121 million or 22 cents per share in 2007.
The company posted non-GAAP income from continuing operations of $117 million in Q4 of 2008 or 22 cents per share versus $109 million or 20 cents per share in Q4 of 2007.
- The full year non-GAAP income from continuing operations was $642 million, an increase of 29% from $499 million recorded in 2007.
- The non-GAAP EPS were $1.19, an increase of 35% versus 88 cents in fiscal year 2007.
