CA Technologies' 2nd quarter profits drop

CA Technologies is headquartered in Islandia. (May 10, CA Technologies is headquartered in Islandia. (May 10, 2012) Photo Credit: Kevin P. Coughlin

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Software maker CA Technologies said its second-quarter profits fell 6 percent as the company struggled to sell new products and reorganize its sales force amid an ailing global economy.

The company, which sells mainframe, storage and security software to large corporations, said Thursday revenue fell 4 percent to $1.15 billion in the three months ended Sept. 30. Net income fell to $222 million, or 48 cents per share.

"Obviously we are disappointed in our performance," CA chief executive Bill McCracken said during a call with analysts.

McCracken attributed the performance, in part, to the weakening global economy, which delayed sales and fueled a 9 percent drop in the company's international revenue. New product and "capacity" sales fell 25 percent. And CA's effort to reorganize its sales force was taking longer than expected, McCracken said.

The company lowered its outlook for the year, saying revenue was likely to shrink by 1 percent to 3 percent. Previously, CA had predicted sales would grow by 1 percent to 2 percent.

Analysts had expected CA's sales to be $1.17 billion. The company's shares were down 5 percent in after-hours trading, to $23.65.

Sales for the company's largest division, mainframe solutions, dropped 5 percent, to $619 million. Revenue for the enterprise solutions unit, whose products include security and cloud-storage software, fell 2 percent, to $438 million.

Profits fell even though CA cut expenses by 6 percent. The company reduced its sales and marketing spending to $317 million, a 14 percent reduction from the same period last year. Spending on product development and enhancements was down 12 percent, to $123 million.

Based in Islandia, CA is Long Island's largest company by stock market value, at roughly $11.7 billion. It has about 1,525 employees on Long Island and close to 14,000 employees worldwide.

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