Edwarda passed away a few weeks ago. There are several threads on SI about her.
BMC will probably be affected tomorrow by CA's warning issued today.... here's one of the news stories...
regards... J
Computer Associates warns of Q1 results
(Adds analyst comments, byline, pvs ISLANDIA, recasts lead)
By Ilaina Jonas
NEW YORK, July 4 (Reuters) - Business software maker Computer
Associates International Inc. <CA.N> on Tuesday warned first-quarter
earnings would fall short of expectations, a move that could bring down the
entire software sector when Wall Street returns to work Wednesday, an
analyst said.
For the quarter ended June 30, analysts had expected the company to
earn 55 cents a share, according to research firm First Call/Thomson
Financial.
Around midnight Tuesday, Computer Associates said it expects revenues
to be in the range of $1.25 billion to $1.3 billion, compared with $1.22
billion in the first quarter of last year.
"That's a big miss," said C.E. Unterberg, Towbin Managing Director Paul
Rodriguez. The New York-based analyst had expected the company to rack up
$1.6 billion in revenues, or contract sales, in the first quarter. "That
stock is going to get killed tomorrow and could take down the whole
software sector."
Rodriguez estimated the stock, which closed at 51 Monday, could fall as
much as 8 to 10 points on Wednesday. The company's 52-week high was
79-7/16, its low 42-5/16.
"It definitely will open down," he said, adding the plunge may make the
company a good buy for bargain hunters.
Computer Associates did not disclose a range for the all-important
earnings-per-share figure it expects. The company said it plans to report
first-quarter results after the market closes July 20
The company attributed the revenue shortfall to weak European sales and
softness in its mainframe business. The company said several large
contracts expected to close in the final days of the quarter have been
delayed. About 40 to 50 percent of software contracts close in the last
month of a quarter, experts have said.
The Islandia, N.Y.-based company makes a range of software businesses
rely on, including those for electronic commerce, data warehousing, storage
and systems management.
Rodriguez said that European corporate buying has been slow to rebound
from the anticipated fear of the Y2K computer problems that failed to
materialize. Although the company has reorganized its European sales force,
the process of integrated that force with its U.S. force may have taken a
little longer than expected.
"It just takes a longer in Europe because you're not there," he said,
of the problem some global corporations face. However, Rodriguez said those
woes may worsen before they improve because of the traditional August
vacation hiatus that pervades through much of Europe.
"The summer quarter in Europe is going to be a disaster," Rodriguez
anticipated.
"Revenue wasn't as strong in the quarter as we had hoped," Sanjay
Kumar, the company's president and chief operating officer said in a
statement. "We intend to work aggressively to address the performance
issues in our European business. With the recently completed Sterling
Software acquisition and a refocused sales and service organization, we
feel very well positioned to capitalize on further opportunities in the
eBusiness marketplace."
Last month, following an-analyst only meeting in which some of those
who intended noted the lack of enthusiasm in the demeanor of Chairman and
Chief Executive Charles Wang and Kumar, shares of Computer Associates
plunged 8 points or 14 percent to 51 June 12. Although the executives
painted a strong picture for revenue growth for the year, they seemed more
muted about the first quarter, some analysts said of the meeting.
However, just days later, Doug Robinson, Computer Associates' vice
president of investor relations, said the interpretations were incorrect.
Rodriguez said a shortfall had been expected and first quarter
traditionally is the company's lowest quarter.
A company representative could not be reached immediately for further
comment.
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