Computer Associates International Thursday reported a narrower third-quarter loss and said it expects to reach profitability earlier than expected.
The company expects to reach profitability within the next fiscal year, about one year ahead of schedule, said Sanjay Kumar, president and CEO of the Islandia-based enterprise software vendor.
Kumar credited the company's performance to its new business model, launched October 2000, which provides for subscription-based software licensing.
"Our ability to be more flexible than ever before, and our ability to be clearly more flexible than our competitors is what's getting large and small customers to come around," Kumar said during a conference call.
For the quarter ended Dec. 31, CA reported a loss of $231 million, or 40 cents per share, compared with a loss of $342 million, or 59 cents per share, in the same quarter a year ago.
Revenue for the quarter reached $749 million, down from $783 million in the same quarter last year.
Under pro forma results, CA reported earnings, excluding charges, of $417 million, or 71 cents per share, up from $248 million, or 42 cents per share, in the same quarter last year.
Wall Street analysts expected the company to report earnings of 60 cents per share, according to First Call/Thompson Financial.
CA reported pro forma revenue of $1.45 billion, up from $1.40 billion a year ago.
In accordance with its new business model, CA reports pro forma results to reflect the fact that it now recognizes product revenue over the term of a license rather than as a lump sum at the time of the sale.
CA ended the quarter with $690 million in cash, up from $543 million at the end of the previous quarter.
Kumar issued guidance for the fourth quarter of a loss of 4 cents to 5 cents per share on revenue of $770 million. On a pro forma basis, the company expects to earn 72 cents per share on revenue of $1.47 billion during the quarter.
Shares of CA closed down $1.08 at $34.90 prior to the announcement.