CA's Kumar Sees Signs Of IT Spending Rebound

Describing the U.S. economy as showing "real signs of growth," Kumar said a number of CA customers are "starting to pursue IT projects that have been placed on the backburner for some period of time."

Kumar's comments came after CA posted better than expected results for its third fiscal quarter ended Dec. 31. The Islandia, N.Y.-based software company, which is making a strong push into the storage and security segments, posted earnings on a fully diluted basis of 16 cents per share. Sales increased 12 percent to $844 million, compared with the year-ago quarter. Net income from continuing operations was $21 million for the quarter compared with a loss of $47 million in the year-ago period.

CA said it booked $670 million in new contracts during the quarter with a weighted contract average of about 2.9 years. New annualized deferred subscription revenue was some $231 million in the quarter, a 20 percent increase over the same period a year ago.

Kumar credited channel partners for much of CA's strong showing in storage and security business during the quarter. Software fees and other revenue, principally representing the channel business, increased $9 million, or 12 percent, over the preceding quarter. Kumar thanked channel partners for their support, noting that he is looking forward to "continuing to build on the strengths of the last two quarters as we continue to roll out our new channel partner programs and to get more of our product into that channel."

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Channel partners should get a boost from a new release of BrightStor ARCserve Backup 11 at the end of this month, Kumar said.

But Kumar had more on his mind than the company's quarterly results. He also talked about last week's notification by the Securities and Exchange Commission that it is considering a civil enforcement proceeding for premature revenue recognition that occurred in 2000. Kumar said CA's own audit committee has nearly completed an investigation to determine whether CA must restate prior financial results under generally accepted accounting principles.

Kumar stressed that CA's own internal audit committee believes that company's current business model is "unaffected" by the internal investigation into the company's accounting practices.