CA said the need to revamp its third-quarter fiscal 2006 earnings statement has delayed the filing of its fourth-quarter and full fiscal year 2006 earnings, which were expected to be announced Tuesday. As part of the restatement, CA will add to the third quarter somewhere in the range of $26 million in additional commission expenses that should have already been there, according to CA.
Revised third-quarter earnings will give CA a loss of 7 cents per share for the fourth quarter, according to the vendor. In April, CA said to expect fourth- quarter earnings per share to come in between 0 cents and 2 cents per share on revenue ranging between $940 million and $950 million.
“Clearly we are disappointed that what would have been a solid year was impacted by execution issues relating to commissions, which adversely affected our fourth-quarter performance and led to a restatement of our third-quarter results,” said John Swainson, president and CEO, in a statement. “We are making changes to ensure that these problems do not recur.”
A CA spokesman said the vendor has until mid-June to file fourth-quarter earnings with the Securities and Exchange Commission. He did not say when to expect the filing to take place.
CA also said Tuesday that it has postponed a Financial Analyst Day, which was scheduled to take place June 8.
Along with its revised earnings, CA will also "report a material weakness in its financial controls relating to the forecasting, processing and monitoring of sales commissions," the vendor said Tuesday. An internal review of these controls are under way, and "further adjustments may be necessary," the vendor said. CA is in its fifth year of suffering losses. Its struggle to reshape itself after a settlement with federal prosecutors related to a $2.2 billion accounting scandal which its former CEO and several others have pled guilty to has been shaken by the recent departures of several other key executives.
On May 15, CA announced the departure of Robert Davis, executive vice president and CFO.
A week prior to Davis' departure, Mark Barrenechea, CA's executive vice president and CTO, announced he would take a job in June as a director at Garnett & Helfrich Capital, Menlo Park, Calif. In April, COO Jeff Clarke announced his departure for a job as president and CEO of the Travel Distribution Services (TDS) division of Cendant, New York.