Computer Associates International Inc was at the center of the technology stock revival yesterday, coming off the back of Intel Corp’s storming figures the night before. CA’s shares surged ahead $6 or almost 15% to close at $46, following better than expected first quarter earnings. The Islandia, New York company had warned in May that the first quarter would face tough comparisons against the year-ago quarter, and it may not meet Street expectations (CI No 2,919). But that’s just the kind of error of judgment the markets, and the company don’t mind seeing one little bit. CA turned in first quarter profits up 35% at $119.8m on revenues up 37% at $792.1m. CA-Unicenter was a significant factor in the growth, according to chairman and CEO Charles Wang in a statement. CA restructured its sales force at the start of the quarter, creating a unit for smaller accounts, which has proved successful, and it also restructured into four business units. These have positioned us well for future growth, according to Sanjay Kumar, president and chief operating officer. Mainframe revenues rose 36% in the quarter, with mid-range sales up 50%. Product licensing rose 52%, and maintenance was up 5%, the first rise in three quarters. But Morgan Stanley reckons that won’t continue, it being just a first quarter thing. The board’s decided to buy back a further 18.75m shares, to add to the 18.8m currently outstanding. Morgan Stanley gushed Business is good at CA and recommended them a strong buy, after the first quarter performance, normally the companys’ weakest. It estimates $1.98 per share for the year.
