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January 24, 2006

CA cracks sales whip after acquisitions

CA yesterday reported financial results that were in line with analysts estimates, but guided lower than expected, as the company attempts to refocus its sales force onto its strategy of selling big software suites, attaching products from recently acquired companies.

By CBR Staff Writer

Chief executive John Swainson said in a conference call with analysts that he had fired regional sales managers in the UK, China, Japan, Korea and Italy, that sales people would get incentives to promote the new strategy, but that under-performing ones would be let go.

CA reported fiscal third-quarter net income of $56m, up 81% on the year-ago quarter, on revenue up 5% at $967m. That was in line with estimates. But the company said the current quarter will produce $975m to $1bn in revenue — the high-end only the middle-point of analysts’ earlier projections.

Swainson attributed some of the blame for the caution on the fact that mainframe management software billings were down, and that the new strategy of selling large multi-product installations has a tendency to lengthen sales cycles.

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