October 22, 2009 / 8:52 PM / 10 years ago

UPDATE 2-CA hints at weak future revenue, shares slide

* Revenue matches Street view

* Says customers are more willing to spend long-term

* Shares slide 6 percent (Adds details on outlook, analyst’s comment)

LOS ANGELES, Oct 22 (Reuters) - CA Inc CA.O reported disappointing software bookings on Thursday, foreshadowing weak future revenue and sending its shares lower despite a better-than-expected profit.

The business software maker, whose rivals include IBM (IBM.N) and BMC Software BMC.N, posted bookings of about $947 million in the fiscal second quarter, down 37 percent from a year earlier. Goldman Sachs had expected bookings as high as $1.3 billion. Bookings are an important indicator of future revenue.

Shares in CA fell more than 5 percent to $22.50 after hours from a regular close of $23.91.

On Thursday, CA changed its full-year 2010 earnings forecast to $1.60 to $1.71 a share, adding a penny to the upper end of the range. The revised outlook remained largely within Wall Street’s expectation for $1.67, according to Thomson Reuters I/B/E/S.

The company projected full-year revenue of $4.3 billion to $4.4 billion, in line with forecasts for $4.342 billion.

In the second quarter, bookings plummeted 41 percent in North America, while international bookings declined 29 percent, or 30 percent on a constant currency basis.

Analysts and tech executives expect cash-strapped corporations to begin spending next year on replacing and upgrading aging equipment.

Investors favored CA for its perceived resilience to the global economic downturn because of its higher levels of recurring revenue, given that the bulk of its sales are earned through long-term corporate contracts.

But some analysts warned that its revenue growth might lag other software makers in any industry spending upturn because of the preponderance of mainframe-based business.

CA recorded a net income of $218 million, or 41 cents a share, in its fiscal second quarter ended Sept. 30, compared with $202 million, or 39 cents a share, a year earlier.

Excluding one-time items including the impact from what it called expenses related to the transition to a new chief executive, the company earned 43 cents a share, beating Wall Street’s estimate of 40 cents.

In September, CA said chief executive John Swainson would retire by the end of 2009, and launched a search for his replacement.

CA posted quarterly revenue in line with Wall Street expectations, while noting an increasing willingness among customers to discuss longer-term software projects.

Revenue slipped 3 percent from a year earlier to $1.07 billion, matching the average estimate. (Reporting by Edwin Chan; Editing Bernard Orr)

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