Computer Associates International late Thursday reported an 81 percent drop in fourth quarter earnings and a 60 percent fall in earnings for the full fiscal year 2005, ended March 31.
CA also revealed that newly discovered accounting inaccuracies would require the restating of earnings for several quarters during the period of 1998 to 2001. Tugging at fourth quarter profits were costs related to CA's settlement of a federal investigation into past accounting practices. CA's is still recovering from a $225 million deferred prosecution agreement for prematurely booking billions in licensing to gloss over poor sales.
For the fourth quarter, the Islandia, N.Y., software vendor reported $17 million in net income, or 3 cents a share, compared with $89 million, or 5 cents a share, in the same period last year. Quarterly revenue was $910 million, up 7 percent from $850 million in the fourth quarter of 2004.
Compliance-related expenses, and taxes resulting from "the planned repatriation of approximately $500 million" of profits made overseas, also hurt earnings, according to CA.
For fiscal year 2005, CA reported net income of $10 million and revenue of $3.5 billion. In fiscal 2004, the vendor reported $25 million in net income and revenue of $3.2 billion.
In fiscal 2005, CA increased bookings from its indirect channel sales by 19 percent over the prior year.
Indirect sales for CA currently account for less than 10 percent of CA's overall sales, said John Swainson, president and CEO. Swainson said he believes CA can achieve as much as a 30/70 split between indirect and direct sales. Looking forward, new products and increased investment in expanding CA's existing customer base will drive overall growth, said Swainson.
"In this year of transition, CA continued to report solid financial results while investing to build a strong foundation for growth," Swainson said.
Subscription revenue for the fourth quarter increased 84 percent year over year to $1.5 billion, $50 million of which came from indirect channel sales.
For the fiscal year, subscription revenue increased 59 percent year over year to $3.6 billion, of which $144 million came from indirect channel sales, according to CA.
For the year, security management bookings nearly doubled over the prior year period, while enterprise systems management bookings increased 42 percent.