This summary is based on the fourth quarter fiscal 2007 earnings call conducted by CA, Inc. (CA) on May 23, 2007.
Vice President of Investor Relations: Julie Cunningham
Chief Executive Officer: John Swainson
Chief Financial Officer: Nancy Cooper
Key Investors Issues
- EPS were a loss of 4 cents per share compared to 7 cents a share last year.
- Net income was a loss of $20 million compared to a loss of $41 million in the period a year earlier.
- Revenue was $1.005 billion compared to $942 million in the comparable prior year period
Fourth Quarter Highlights
Total revenue was $1 billion, up 7% from the prior year or 4% on a constant currency basis.
Aside from currency effects the increase in fourth quarter total revenue was primarily driven by a growth in subscription revenue, which grew 11% from the prior year period or 8% in constant currency.
- Revenue from professional services increased 3% over the prior year period.
On a non GAAP basis operating expenses re $830 million compared to $851 million in the prior year period, despite negative currency impact.
This lower expense level reflects lower expense for commissions, royalties and bonuses, lower promotion expenses, and progress on expense management initiatives. Cost of services grew more than revenue, and it will be focusing on this going forward.
Non GAAP operating income was $175 million compared to $91 million in the prior year period.
- Net interest expense increased to $15 million compared to $10 million in the prior year period.
- Non GAAP net income was $109 million, or 20 cents per common share, 54% increase per share over the prior year period.
The following items are excluded from non GAAP expenses - purchased software and intangible amortization, in process R&D and restructuring and other.
When these expenses are included total expenses before interest and taxes were $1.02 billion, up from $988 million in the prior year period.
- The company recorded restructuring and other expenses of $100 million, of which the largest portion was related it to severance expenses of approximately $73 million.
GAAP net loss from continuing operations was $20 million, or a loss of 4 cents per common share compared to $39 million or a loss of 7 cents per share in the prior year period.
- Cash flow from operations was $521 million compared to $566 million in the prior year period.
- The company had a year over year decrease and contracts the word build and collector in a single installment.
- The company is proceeding with an accelerated share repurchase of up to $500 million.
After a challenging first half, the company reset its plan and increased focus on execution in all areas of the business.
As a result, the company exited the year with a solid performance and positive momentum going into fiscal 2008.
- The company inaugurated a new customer alliance program at CA world.
- Direct sales organization is focused on selling new software, improving enterprise account penetration, and improving the yields on renewals.
