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Business

CA Tech profit up, but 500 layoffs planned

CA Technologies' latest earnings report had some good

CA Technologies' latest earnings report had some good news for investors, but some not-so-good news for employees. Revenue is good, and 500 employees will be getting pink slips. Photo Credit: iStock

CA Technologies' latest earnings report had some good news for investors but some not-so-good news for employees.

Revenue and net income rose in its fiscal first quarter, but the company plans to cut up to 500 jobs, the Islandia-based software company announced Wednesday after the stock markets closed.

CA's revenue rose 9 percent to $1.16 billion in the three-month period that ended June 30, compared with $1.07 billion a year ago. Net income rose 11 percent to $241 million, from $217 million a year ago. Earnings per share rose 12 percent from 42 cents to 47 cents.

"We've had a solid start to the fiscal year 2012," Bill McCracken, CA's chief executive, said.

But he also said revenue overseas didn't rise as fast as expected. International sales rose 8 percent to $447 million but were down 2 percent when accounting for currency changes. By contrast, the North America revenue rose 9 percent to $716 million when accounting for currency changes.

The company's products include information technology-management software for mainframes and virtual and cloud computing. The latter delivers services over the Internet.

The company declined to say how many jobs it plans to cut on Long Island in the second quarter. CA employs 1,600 people on the Island, part of its 13,400 staff worldwide.

"This action is a continuation of the work the company has been doing to optimize its business by reallocating resources from nonstrategic areas to growth technologies and regions, and divesting nonstrategic areas of the business," McCracken said.

CA plans to take a $35 million to $45 million charge in its second quarter in connection with the planned reductions.

One area CA considers key to new business is cloud computing. McCracken said the company would announce some new cloud products next week. During the quarter CA announced that it was acquiring TKO Inc., a Texas cloud-computing company, for $330 million in cash. On the other hand, it sold off its Internet security business during the quarter.

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