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CA Technologies Reports Third Quarter Fiscal Year 2013 Results

For the third quarter of fiscal year 2013, the Company’s effective GAAP tax rate was 29.9 percent, compared with 34.9 percent in the prior year period. The Company’s effective non-GAAP tax rate was 30.7 percent, compared with 31.5 percent in the prior year period.

SEGMENT INFORMATION

  • Mainframe Solutions revenue was $622 million, down 8 percent in constant currency and 9 percent as reported. The single license payment in the third quarter of fiscal 2012 contributed 6 percentage points to the year-over-year decline. Operating expense was $248 million and operating profit was $374 million. Operating margin was 60 percent, up 1 percentage point from a year ago.
  • Enterprise Solutions revenue was $476 million, flat in constant currency and as reported. Operating expense was $426 million and operating profit was $50 million. Operating margin was 11 percent, down 1 percentage point from a year ago.
  • Services revenue was $97 million, down 5 percent in constant currency and 6 percent as reported. Operating expense was $93 million and operating profit was $4 million. Operating margin was 4 percent, down 7 percentage points from a year ago.

CASH FLOW FROM CONTINUING OPERATIONS

Cash flow from continuing operations in the third quarter was $566 million, compared with $396 million in the prior year. The quarter included an increase of $150 million in single installment payments year-over-year, primarily attributable to one single installment payment of more than $100 million.

CAPITAL STRUCTURE

  • Cash, cash equivalents and investments at Dec. 31, 2012 were $2.548 billion.
  • With $1.301 billion in total debt outstanding and a borrowing position of $140 million on the Company’s notional pooling arrangement, the Company’s net cash, cash equivalents and investments were $1.107 billion.
  • During the quarter, the Company repurchased 3.4 million shares in the market for approximately $75 million.
  • The Company is currently authorized to repurchase an additional $579 million of common stock through fiscal year 2014.
  • The Company’s outstanding share count at Dec. 31, 2012 was 451 million.
  • During the quarter, the Company distributed $114 million in dividends.

BUSINESS HIGHLIGHTS

During the third quarter, the Company announced:

  • Michael P. Gregoire’s election as the Company’s chief executive officer and addition to the Company’s Board of Directors, and Bill McCracken’s retirement as chief executive officer and Board member, effective January 7, 2013.
  • Adoption of a Stockholder Protection Rights Agreement to replace the Company’s existing Rights Agreement, which expired on November 30, 2012.

OUTLOOK FOR FISCAL YEAR 2013 Update

The Company reaffirmed its revenue and GAAP and non-GAAP earnings per share from continuing operations and cash flow from continuing operations guidance for fiscal year 2013. The following guidance consists of "forward-looking statements" (as defined below).

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