Computer Associates Warns of First-Quarter Earnings Shortfall

Computer Associates (CA Quote) late Monday warned that its first-quarter revenue would fall short of internal expectations, leading the business software maker to miss Wall Street profit estimates.

In a press release put out at 11:54 p.m. EDT Monday, the Islandia, N.Y., company said it expects contract revenue for the quarter ended June 30 to be $1.25 billion to $1.3 billion, topping the year-ago $1.22 billion but insufficient to meet estimates. The current 20-analyst First Call/Thomson Financial estimate calls for first-quarter earnings of 55 cents a share vs. the year-earlier 49 cents.

Computer Associates blamed weak European sales and softness in its mainframe business for the shortfall. The company said several large contracts that were expected to close in the final days of the quarter have been delayed.

"Revenue wasn't as strong in the quarter as we had hoped," President and COO Sanjay Kumar said in the release. "We intend to work aggressively to address the performance issues in our European business." Kumar said the company's recently completed Sterling Software acquisition and a "refocused sales and service organization" leave it well positioned to capitalize on future opportunities. ...