Computer Associates became the darling of Wall Street on Tuesday, closing on an all time high following the announcement of a 22 per cent increase in profits for its second quarter.
For the second quarter ended 30 September, revenue was $1.1 billion, an increase of 13 per cent over the $990.1 million reported in the comparable period the previous year. Net income was $271.9 million, an increase of 22 per cent. Second quarter earnings per share was 72 cents compared to 59 cents, also up 22 per cent.
For the six months, revenue was up 13 per cent to $2 billion, while net income was up 25 per cent to $427.6 million and earnings per share up 27 per cent to 90 cents.
The results exceeded Wall Street expectations and sent the company's share price to an all time high of $79 11/16 at the close of trading on Tuesday afternoon.
The Unicenter TNG systems managment framework and products were cited as the main contributors to the profit increase. Key Unicenter TNG wins during the second quarter included Marks & Spencer and Ladbroke Racing in the UK and Isuzu Motors. Charles Wang, CA's chief executive officer, said: "The phenomenal success of Unicenter TNG contributed significantly to our record financial performance."
"We are very pleased with the direction of Unicenter TNG, particularly the accelerated momentum created by our new framework initiative," added Sanjay Kumar, CA chief operating officer. "Operationally, all of our geographic areas did well and our European business continued to make excellent progress."
But the company was also able to demonstrate that there is still life in the Ingres database with the announcement that the Australian Department of Defence has chosen CA OpenIngres over Oracle as the core database for its new training and information management system.
The contract is for an initial purchase of 400 licences, but is expected to grow as the new system will form the basis of future IT development within the Army's Training Command. CA began shipping OpenIngres 2.0 - which it claims is the most comprehensive upgrade in the product's history - during the second quarter.
In a separate announcement today, Computer Associates announced that its board of directors has declared a three-for-two stock split. The record date will be 5 November 1997 and the payment date will be 26 November 1997.
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