Computer Associates (CA) has reiterated its uncertainty as to when sales will recover following a first quarter warning of slow growth.
Customers have delayed making purchasing decisions because of fears over the Asian crisis.
For its third quarter, CA saw revenues increase 18 per cent to $1.05 billion, but made a $480.8 million loss due to a one-off charge of $675 million. The charge, which was expected, related to shares issued to Charles Wang, CA?s chairman, Sanjay Kumar, the company?s president, and Russell Arzt, its executive vice president, but despite this, earnings exceeded Wall Street?s expectations (VNU Newswire, 22 July).
However, Kumar warned at the time that "the ripple effect of Asia, coupled with deferred software purchasing decisions as customers deal with their Year 2000 projects and mainframe hardware transition issues, leads us to believe that our revenue and earnings growth will slow over the next several quarters."
Since the announcement, CA?s share price has slumped 47 per cent to about $30, a situation not helped by the general market downturn.
But, according to US reports, Wang said yesterday that "uneasiness" among the company?s top three to five customers about Asia had continued and it did not know when sales would improve.
"I don?t have a crystal ball. I don?t know. It depends on the International Monetary Fund and what they?re going to do and whether currencies get devalued," he said.
But, he added that CA was still comfortable with Wall Street estimates of earnings of 48 cents for its fiscal second quarter.
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