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CA Technologies sales dip but profits rise

CA's chief executive Michael Gregoire said the company

CA's chief executive Michael Gregoire said the company planned to increase investments in marketing and research and development during the next two quarters. (Dec. 12, 2012) Photo Credit: Handout

Software maker CA Technologies Inc. reported lower sales for the quarter ended Sept. 30 but higher profits due to a reduction in expenses.

The Islandia-based company said Thursday its quarterly revenue was $1.14 billion, down 1 percent from $1.15 billion during the same period last year. CA's profits rose 8 percent to $240 million, or 53 cents per share. The figures came in above analysts' expectations of $1.1 billion in sales and earnings of 41 cents per share, according to Bloomberg.

CA reported its results after the close of regular stock trading; its shares rose nearly 3 percent in aftermarket trading to $31.29.

"This is clearly a beginning, but we still have work to do to get the aggregate portfolio growing," chief executive Michael Gregoire said in a news release. He added that the company planned to increase investments in marketing and research and development in the next two quarters.

The company also increased its yearly guidance, saying it expects its revenue decline this year to be slower than it previously thought.

Most of the lowered expenses that helped boost profits for the quarter came from cutbacks in sales and marketing, a segment Gregoire has focused on transforming.

Gregoire, who took over as head of CA in January, has sought to jump-start innovation at the software giant, which analysts have said was bloated with aging products and suffered from weak growth. The company's revenue has dipped in the last six quarters.

In a call with analysts, Gregoire said the changes he is making at the company, including laying off 1,200 employees, refocusing the sales and marketing department and consolidating research and development to key sites, are about halfway completed. Most of the affected employees have already exited the company, he added.

CA, which develops and sells mainframe and security software for large corporations, is the largest public company by stock market value on Long Island.

At the end of trading Thursday, the company's value was around $13.9 billion. Locally, the company employed around 1,525 workers as of May.


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