May 25, 2004 (03:05 PM EDT)
CA Offers To Settle With Government; 4Q Sales And Profits Grow
Read the Original Article at InformationWeek
Computer Associates has set aside $10 million to pay fines associated with the ongoing Securities and Exchange Commission and Department of Justice probes into the company's accounting practices. The $10 million charge, taken in CA's most recent quarter, is termed an "initial offer" to the government.
In its fourth-quarter earnings statement, issued Tuesday, the company said it couldn't predict the outcome of the investigations or any fine or other penalties that might be imposed.
Interim CEO Kenneth Cron said Monday at CAWorld that he hopes the government investigation would be over soon, and wanted to use the conference as a "beginning of a new chapter" for the enterprise software company.
"The company's internal investigation is done, and it resulted in the restatement (of fiscal 2000 and 2001 earnings) and management changes," Cron said. "The government investigation is ongoing, we're cooperating, and we hope it's concluded shortly. That's in the government hands. They have their own point of view and they will move at the speed they want to."
CA originally was scheduled to report its results on May 12, but said earlier this month that it would have to delay reporting results for the fourth quarter and full year because its staff was overburdened by an accounting restatement. The accounting scandal led to the ouster of CEO Sanjay Kumar. Cron, a board member, is serving as interim CEO while the company searches for a permanent CEO.
In its earnings statement for the fiscal year ended March 31, CA posted full-year earnings of $25 million, or 4 cents per share, compared with a loss of $267 million, or 46 cents per share, in the previous year. Revenue rose 8% to $3.28 billion.
CA reported net income of $89 million, or 15 cents a share, for its fourth quarter ended March 31, compared with a loss of $106 million, or 18 cents a share, million in the same quarter last year. Sales climbed to $850 million from $775 million. Subscription revenue rose to $535 million from $395 million, as the company continued to move toward a more subscription-driven business model.
For the first quarter of fiscal 2005, the company expects revenue of $865 million to $885 million, with earnings between 5 cents and 7 cents. For the full year, it expects revenue of $3.5 billion to $3.7 billion, with earnings between 28 cents and 33 cents.