Computer Associates' 1Q Profit Up

But the Islandia-based company also said Thursday it expects second-quarter earnings, before items, to fall below Wall Street's forecast.

The company's first-quarter earnings rose to $53 million, or 9 cents a share, from $8 million, or 1 cent a share, a year ago.

Excluding acquisition amortization and a shareholder litigation settlement, the company earned 21 cents a share, topping Wall Street's view of 18 cents a share, based on a Thomson First Call survey of analysts. Year-earlier earnings were 14 cents a share, excluding items.

First-quarter revenue rose to $860 million from $786 million last year.

For the second quarter, Computer Associates expects net income of 3 to 5 cents a share on revenue of $830 million to $850 million. A year earlier, the company reported a loss of 15 cents a share on revenue of $833 million.

Excluding items, Computer Associates expects second-quarter earnings of 15 cents to 17 cents per share, which is below a First Call projection of 18 cents per share on revenue of $867.6 million.

For all of fiscal 2005, Computer Associates lowered its net income guidance to between 25 and 30 cents a share from its May forecast of 28 to 33 cents a share. In fiscal 2004, the company earned $25 million, or 4 cents a share.

Excluding items, the company lowered its fiscal 2005 guidance to between 70 cents and 75 cents a share, which is below a First Call projection of 77 cents a share. Computer Associates' prior forecast, excluding items, was for full-year earnings of 73 cents to 78 cents a share.

In April, Sanjay Kumar resigned as Computer Associates' chief executive and chairman after an accounting scandal produced four guilty pleas from top executives at the company. He stayed on as chief software architect, but left the company completely in June.

Days after his resignation as CEO and chairman, the company restated its earnings from 2000 and 2001 to reflect $2.2 billion in improperly booked revenue.

The company is now led by interim chief executive Ken Cron, a former head of Vivendi Universal's games division, who will lead the company on a temporary basis.

Shares of Computer Associates dropped 2 cents Thursday to close at $24.73 on the New York Stock Exchange. After its earnings were released, the stock fell another 2 cents to $24.71 in after-hours trading.

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