CA Narrows 2Q Loss

For the quarter ended Sept. 30, CA reported a loss of $52 million, or 9 cents per share, compared with a loss of $291 million, or 50 cents per share, the same quarter a year ago.

CA reported $772 million in revenue for the quarter, up 5 percent from $733 million the same quarter last year.

Excluding items, CA reported earnings of 4 cents per share, which beat financial analysts' estimates.

Analysts expected the company to earn 2 cents on revenue of $770 million, according to First Call/Thompson Financial.

The company reiterated full-year revenue estimates of $3.1 billion to $3.2 billion, but increased its expectations for diluted operations to 14 cents to 16 cents per share, up from previous estimates of 10 cents to 13 cents per share.

For the third quarter, the company expects to earn 4 cents to 5 cents on a diluted operational basis on revenue ranging from $770 million to $790 million.

CA President and CEO Sanjay Kumar attributed the company's performance during the second quarter, despite a challenging business environment, to its flexible, subscription-based software licensing model, launched in October 2000.

"Our business model helped customers get into new products and buy them in smaller increments," Kumar said. "We're now reaping the benefits of the bold approach we adopted several years ago."

While CA's subscription revenue grew 83 percent to $343 million compared with the same quarter last year, its channel business for the quarter dipped 10 percent to approximately $95 million.

However, the company expects its channel business to grow after naming a new worldwide channel chief, George Kafkarkou, earlier this month and with the release next week of ARCserve Backup 9.0, the latest version of CA's backup software, CA executives said.

CA, based here, continues to cooperate with a federal investigation into its accounting practices, Kumar said.

Last week CA named William Stavropoulos, chairman and former CEO of The Dow Chemical Company, to its board, expanding the number of board members to 12.

Shares of CA closed down 79 cents at $12.10 Tuesday prior to the release of its financial results.