Computer Associates (CA) turned in third quarter figures $0.03 ahead of analysts? expectations due to strong sales of its Unicenter TNG systems management software and growth in its services business.
The software giant was very bullish in praise of its own results, indicating that, while it was not immune to unpleasant surprises such as last July?s losses (see VNU Newswire, 22 July, 1998), it was confident it was taking market share away from arch rival, Tivoli, which is a unit of IBM.
Sanjay Kumar, CA?s president and chief operating officer, said: "As TNG gains momentum and market share, it is driving new revenue opportunities for both products and services. Our professional services business was a great success and we?re now transforming our business focus from a product to a solutions business. We?re taking more information management products and have more services to wrap around them, and we?re becoming a trusted advisor in the services business."
He added that the eight per cent slump to $650 million in Unicenter mainframe sales had been expected, and was offset by a 31 per cent growth to $621 million in client-server sales.
While large deals had dropped to only one or two this quarter, Kumar said he also expected this to rally over time. Professional services, meanwhile, grew 97 per cent year on year to $77 million.
For its third quarter, which ended on 31 December, 1998, CA?s total revenues increased by 10 per cent to $1.4 billion, while profits rose seven per cent to $354.6 million or $0.64 per share.
For the nine months, sales grew by 11 per cent to $3.6 billion, while earnings were up 10 per cent to $842.7 million or $1.49, excluding a $675 million charge related to the sale of shares under a 1995 Key Employee Stock Ownership Plan.
The firm said its turnover was also boosted by a 19 per cent sales increase from its international subsidiaries to $500 million compared with lower growth rates for the domestic US market, which generated $876 million.
The UK, France and Germany were singled out for particular praise by Kumar, despite the fact that France and Germany still have work to do because they are not yet "100 per cent" on track.
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