Computer Associates warns on revenue

Software maker Computer Associates International Inc. on Thursday said quarterly revenue will fall short of expectations on softness in its services business, but said profits should meet previous estimates because of expense controls.

The company’s share price rose in after-hours trade to $24.89, up about 1 percent from its close of $24.54 on the New York Stock Exchange on Thursday.

The company, one of several software vendors the past week to warn quarterly results will fall below previous forecasts, said it expects total revenues for its first quarter ended June 30 between $830 million and $850 million, down from a previous forecast of $865 million to $885 million.

Analysts surveyed by Reuters Estimates had been expecting first-quarter revenue of $877 million, with a range of estimate of $868 million to $891 million.

But the company, scheduled to report final results for the quarter on July 22, said it still expected to meet earnings-per-share forecasts as the result of expense controls.

The company, based Islandia, New York, forecast EPS of 5 cents to 7 cents, with earnings per share excluding items of 17 cents to 19 cents. Analysts polled by Reuters Estimates were expecting 18 cents per share on that basis.

Some analysts said the company’s preliminary results were comparatively better than revised expectations put out by many other software vendors, such Siebel Systems Inc. and PeopleSoft Inc., that have warned in recent days about weaker revenue or profits in the the current period.

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“I think these were pretty good (preliminary) results considering what we have seen” the past week, said Curtis Shauger, an analyst at CIBC World Markets Corp.

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Shauger, who does not own Computer Associates stock, said he was “a bit surprised” the company did not have to trim its earnings-per-share view, but said the company had managed to cut expenses in areas such as marketing, and maintained adequate cash on hand.

Shauger said he currently rated Computer Associates “sector performer,” which he said was equivalent to being “neutral” on the company.

Computer Associates has been plagued by a long-running federal accounting probe the past two years.