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October 28, 2011

CA Technologies Q2 FY2012 revenue grows to $1.2bn

Lowers forecast revenue for FY2012 to 6%

By CBR Staff Writer

IT management software company CA Technologies’ revenue grew 5% to $1.2bn in its second quarter of fiscal year 2012, ended 30 September 2011, compared to the same quarter in FY 2011.

The company reported EPS at $0.47, a dip of 7% in constant currency. Cash flow from operations was $190m, up 37%.

Year-over-year revenue grew to $1.2bn, up 5%, while the total revenue backlog was $8.07 bn, up 4% in constant currency and as reported, said the company.

Geographically, North America revenue was $735m, up 10%. International revenue was $465m, down 1% in constant currency.

Total bookings in the second quarter were $972m, down 4%. North America bookings were $664m, while international bookings were $308m, down 11% in constant currency and 8% as reported.

The company said that it has signed a total of 10 license agreements with contract values in excess of $10m each, for an aggregate contract value of $321m. During the second quarter of fiscal year 2011, the company signed a total of 14 license agreements with contract values in excess of $10m each, for an aggregate contract value of $361m.

Operating expenses, before interest and income taxes, were $867m, and operating income, before interest and income taxes, was $333m, down 6% in constant currency and up 10% as reported. Operating margin was 28 %, flat with the prior year period, said CA Technologies.

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Mainframe Solutions revenue was $655m, Enterprise Solutions revenue was $449m, and services revenue was $96m, said the company.

Cash flow from continuing operations in the second quarter was $190m, compared to $129m in the prior year. Cash flow was favorably affected by improved collections, especially in North America, and lower cash taxes. In addition, cash flow was unfavorably affected by higher disbursements, primarily driven to higher payroll resulting from acquisitions and increased commission expense, said the company.

CA Technologies chief executive officer Bill McCracken said, "We achieved our objectives for earnings per share, cash and margin for the second quarter.

"However, we were not pleased with one area, new product sales, relative to our expectations. As a result, we have revised our revenue outlook to reflect the shortfall in new product sales and the macroeconomic environment. But we also have raised the bottom end of our earnings per share guidance to reflect continued operational efficiency and discipline.

"In the second half of the 2012 fiscal year, we will focus on improving new product sales by expanding our product penetration, improving execution in EMEA and driving consistent performance in our acquired companies. We remain convinced that our strategic direction and supporting investments are the right ones, and are confident that we will meet our revised outlook. We also are mindful of making the right choices to maximize shareholder returns and will continue to return cash through stock repurchases and dividends."

The company has adjusted its outlook for fiscal year 2012, updating total revenue growth to a range of 5% to 6%, compared to the previous outlook of 6% to 8%.

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