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  1. Technology
July 21, 1998


By CBR Staff Writer

Computer Associates International Inc, the Islandia, New York- based systems management software giant reported substantial revenue growth in its first quarter, but warned of an impending slow-down in both revenue and earnings as the Asian crisis hits its multinational customers base. CA’s net earnings for the quarter were also hit by a previously disclosed billion dollar stock award given to its senior executives, pushing the company into heavy losses. The first quarter net deficit dived to $481m compared to last year’s $156m of profits, while revenues were up 18% to $1.05bn. But the loss was wholly created by the $1.07bn pre-tax charge on the vesting of twenty million shares awarded to the three top CA executives, chief executive Charles Wang, chief operating officer Sanjay Kumar and executive vice president Russell Artzt. The three were scheduled to receive this unprecedented bonus after CA’s share price topped a pre- determined high for 60 days over a twelve-month period. Before the stock award, CA made net earnings of $194m, up 25% on last year. But COO Sanjay Kumar added a cautionary note to the results. We our concerned about the ripple effect of the Asian economic turmoil on our multinational clients and its potentially adverse impact on our near-term business, he said. He implied that a buoyant market for CA’s Unicenter software in North and South America had compensated for worsening business conditions in Asia over the first quarter. Added to which, he warned of customers deferring software purchases to pump resources into their year 2000 compliance efforts. All of which he said would prompt a slow in growth at CA over the next several quarters Kumar said. The results were released after the close of trading.

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