CA Technologies profits dip 5 percent
Software maker CA Technologies, Long Island's largest company by stock market value, said Tuesday its third-quarter profits dipped 5 percent as revenue from its mainframe computer programs declined.
The company, which sells mainframe, storage and security software to large corporations, said sales dropped 5 percent, to $1.2 billion, in the three months ended Dec. 31, compared to the same period last year. Net income fell to $251 million.
Sales for mainframe software, the company's largest unit, fell 9 percent, to $622 million. The drop stemmed largely from a 2009 legal settlement that gave the company a $39 million single license payment, boosting its third quarter sales last year.
The earnings report was the first for CA chief executive Michael Gregoire. He joined the company Jan. 7 to replace Bill McCracken, who is retiring after two years at the helm.
During a call with analysts, Gregoire said he was drawn to CA, in part, by the company's growth potential, saying it had the ingredients to become a leader in the $75-billion market for corporate software.
But to do that, he said, CA needs to become more aggressive and innovative to keep pace with the ever-changing industry.
"We have a strong competency in selling large, complex enterprise deals, but we do not move the needle quickly enough in some of the new product offerings," Gregoire said.
Despite the drop in profits, CA's income per share rose to 55 cents because the company bought back 3.4 million shares during the quarter for $75 million, reducing the number of outstanding shares.
Analysts had expected CA's sales to be $1.17 billion. The company's shares were up 25 cents in after-hours trading, to $24.80.
The stock market value of Islandia-based CA is roughly $11.28 billion. It has about 1,525 employees on Long Island and close to 14,000 employees worldwide.