CA Earnings: Revenue SLIPS After Increasing Four Quarters in a Row, Net Income Declines

S&P 500 (NYSE:SPY) component CA Inc. (NASDAQ:CA) reported its results for the first quarter. CA is an information technology software and service company that helps organizations manage and secure their IT infrastructures and services.

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CA Inc. Earnings Cheat Sheet

Results: Net income for the computer software fell to $240 million (51 cents per share) vs. $241 million (47 cents per share) a year earlier. This is a decline of 0.4% from the year-earlier quarter.

Revenue: Fell 1.5% to $1.15 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: CA Inc. fell short of the mean analyst estimate of 56 cents per share. It fell short of the average revenue estimate of $1.18 billion.

Quoting Management: “Despite the headwinds to top-line growth we experienced during the first quarter, we remain committed to delivering the earnings per share and cash flow from operations growth we provided at the beginning of the fiscal year,” said Bill McCracken, chief executive officer, CA Technologies. “In addition to the benefits of a $35 million intellectual property transaction we closed during the quarter, we will drive increased profitability in our organic business and now expect to deliver further expansion of our GAAP operating margin to 31 percent and our non-GAAP operating margin to 36 percent for the full fiscal year.”

Key Stats:

Last quarter’s profit decrease ends a four-quarter streak of profit increases. In the fourth quarter of the last fiscal year, net income rose 12.2% from the year earlier, while the figure increased 31.5% in the third quarter of the last fiscal year, 6.3% in the second quarter of the last fiscal year and 11.1% in the first quarter of the last fiscal year.

A year-over-year revenue decrease last quarter breaks a four-quarter streak of revenue increases. The best quarter in that span was the fourth quarter of the last fiscal year, which saw revenue rise 11.8%.

After beating analyst estimates for the two previous quarters, the company fell short of forecasts. In the fourth quarter of the last fiscal year, it topped the mark by 3 cents, and in the third quarter of the last fiscal year, it was ahead by 9 cents.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the second quarter has moved down from 58 cents a share to 57 cents over the last thirty days. For the fiscal year, the average estimate has moved down from $2.39 a share to $2.34 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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