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CA Technologies Posts 1Q Fiscal Year 2015 Results [Professional Services Close - Up](Professional Services Close - Up Via Acquire Media NewsEdge) CA Technologies reported financial results for its first quarter fiscal 2015, ended June 30. Mike Gregoire, CA Technologies CEO, made the following comments: "CA's results for the first quarter are in-line with our expectations, reflecting continued financial discipline and a strong performance in connection with renewals, which contributed to an uptick in Enterprise Solutions new sales. In addition, the investment focus and new capabilities we established last year allowed us to make important strategic progress in the quarter. We launched a highly differentiated, CA-built SaaS solution in the IT Service Management space with a powerful user experience and one of the industry's most attractive time-to-value offerings. And, we announced the divestiture of the arcserve business, further managing our portfolio and sharpening our focus. "As we look ahead to the balance of FY2015, we know that there is still much work ahead of us to build CA for growth. We will continue to focus on our strengths, invest in key growth areas and drive the level of execution needed to advance our business strategy, serve our customers and deliver long-term value for our shareholders." In its release on July 23, the Company noted: -The decrease in revenue was primarily due to a decrease in subscription and maintenance revenue and a decrease in professional services revenue. -The decrease in bookings was primarily due to lower year-over- year professional services bookings, due to a decrease in the size and number of professional services engagements, including non-core engagements with government customers that are not directly related to our software product sales. -The Company executed a total of 8 license agreements with incremental contract values in excess of $10 million each, for an aggregate contract value of $330 million. During the first quarter of fiscal 2014, the Company executed a total of 9 license agreements with incremental contract values in excess of $10 million each, for an aggregate contract value of $323 million. -The weighted average duration of subscription and maintenance bookings for the quarter was 3.60 years, compared with 3.10 years for the same period in fiscal 2014, primarily attributable to a contract renewal with a large financial services company. -GAAP and non-GAAP EPS in the first quarter of fiscal 2015 were negatively affected by $0.58 and $0.15, respectively, from an increase in the Company's GAAP and non-GAAP effective tax rates. The Company recognized a net discrete tax benefit of approximately $181 million in the first quarter of fiscal 2014, primarily from the resolution of uncertain tax positions relating to U.S. and non-U.S. jurisdictions. -GAAP operating expenses include approximately $9 million in costs associated with the Fiscal 2014 Rebalancing Plan, compared with $117 million in the first quarter of fiscal 2014. This resulted in a positive impact of $0.39 on GAAP EPS. The Company provided highlights from the quarter -Customer traction for CA innovations continued in the quarter. -A financial services company is incorporating the full suite of CA virtualization and automation solutions to improve speed and quality of application production. -Together with a partner, CA signed a multi-million dollar contract with a large government entity to help improve the quality of a high-profile, consumer-facing healthcare application. -Tata Sky - India based direct broadcast television provider - selected CA Application Performance Management, Nimsoft Monitoring and Workload Automation. -Dillard's - a US-based department store chain - chose CA as the company-wide API solution. -CA launched Cloud Service Management, a CA-built solution that redefines SaaS in the segment by delivering rapid time to value and a differentiated user-experience. -Further strengthened the leadership team: named Amit Chatterjee EVP, Enterprise Solutions and Technology Group. -The increase in Mainframe Solutions and Enterprise Solutions operating margin in the first quarter of fiscal 2015 was primarily a result of timing of selling and marketing expenses and a reduction in personnel costs. -The decrease in Enterprise Solutions revenue for the first quarter of fiscal 2015 was primarily due to a decrease in new product sales in the prior fiscal year. -The decline in Services revenue was primarily due to a decrease in the size and number of professional services engagements including non-core engagements with government customers that are not directly related to our software product sales. CASH FLOW FROM OPERATIONS -Cash flow from operations in the first quarter of fiscal 2015 was $166 million, compared with $3 million in the prior year. The increase was primarily due to a decrease in income tax payments. CAPITAL STRUCTURE -Cash, cash equivalents and investments at June 30, were $3.255 billion. -With $1.769 billion in total debt outstanding and $140 million in notional pooling, the Company's net cash, cash equivalents and investments position was $1.346 billion. -In the first quarter of fiscal 2015, the Company repurchased 1.7 million shares of common stock for $50 million. -The Company is currently authorized to purchase $950 million of its common stock under its current stock repurchase program. -The Company distributed $111 million in dividends to shareholders. -The Company's outstanding share count at June 30, was 440 million. OUTLOOK FOR FISCAL YEAR 2015 The Company noted that it expects the following: -Total revenue to decrease in a range of minus 2 percent to minus 1 percent in constant currency. At June 30, exchange rates, this translates to reported revenue of $4.34 billion to $4.40 billion. -GAAP diluted earnings per share from continuing operations to decrease in a range of minus 12 percent to minus 8 percent in constant currency. At June 30, exchange rates, this translates to reported GAAP diluted earnings per share of $1.77 to $1.84. -Non-GAAP diluted earnings per share from continuing operations to decrease in a range of minus 21 percent to minus 19 percent in constant currency. At June 30, exchange rates, this translates to reported non-GAAP diluted earnings per share of $2.42 to $2.49. -Cash flow from continuing operations to increase in a range of 5 percent to 12 percent in constant currency. At June 30, exchange rates, this translates to reported cash flow from continuing operations of $1.04 billion to $1.11 billion. CA Technologies provides IT management solutions that help customers manage and secure complex IT environments to support agile business services. More information: ca.com ((Comments on this story may be sent to [email protected])) (c) 2014 ProQuest Information and Learning Company; All Rights Reserved. |