CA Narrows 4Q Loss

Computer Associates narrowed its fourth-quarter net loss to $106 million, versus $238 million a year ago, and reported a 4% increase in revenue. CA, the largest supplier of utility software for mainframes, also forecast first-quarter and fiscal-year 2004 results that would exceed Wall Street expectations.

For the 2003 fiscal year, CA reported a net loss of $267 million, or 46 cents per share, versus a loss of $1.1 billion, or $1.91 per share, in 2002. Revenue was $3.2 billion, up 5% from $2.96 billion last year.

CFO Ira Zar said during a conference call Wednesday with analysts that CA is putting an "emphasis on plain English" in presenting its results to investors. Since October 2000, CA has been presenting its financial results under a "new business model" that recognizes revenue over time, instead of pushing the bulk of revenue from new contracts into the current quarter.

According to that accounting method, subscription revenue for the fourth quarter, ended March 31, rose 46%, to $395 million. Overall revenue increased less than 4% though, to $801 million, as revenue from software fees, maintenance, financing activities, and IT services declined. Revenue accounting at CA is the subject of two federal investigations. CA says it signed $629 million in new business during the quarter, though it won't recognize that revenue until future quarters.

Meanwhile, the company forecast a per-share loss of 3 or 4 cents for the first quarter of fiscal 2004, which ends June 30, on revenue of $795 million to $810 million. CA says it will take a $15 million charge during the quarter to account for severance packages paid to 450 employees laid off in April. For fiscal 2004, CA expects to lose 5 to 10 cents per share on revenue of $3.3 billion to $3.4 billion.

Shares of CA closed Wednesday up 60 cents, at $18.19, in advance of the earnings report.