CA Stability Still on Hold

Monday's surprise announcement that CA(CA) is losing yet another top executive is worrying investors who appear to be growing tired of waiting for the software giant's stock to recover and lending ammunition to the company's persistent critics.

"CA needs to convince shareholders that it really has made a fresh start," says Con Hitchock, outside counsel and spokesman for Amalgamated Bank LongView Funds, a holder of CA shares. "The revolving door isn't doing the trick."

The departure of CFO Robert Davis comes a week after CA's chief technology officer, Mark Barrenechea, left to joint a venture-capital company. Jeff Clarke, who was chief operating officer, left for a position at Cendant(CD) on April 18.

Later that month, the company reported fourth-quarter earnings and revenue that badly missed Wall Street forecasts due to weak products sales, ballooning sales commissions and an apparent miscalculation by Davis that likely cost him his job.

And all of that follows a guilty plea by former CEO Sanjay Kumar to charges of fraud and obstruction related to a $2.2 billion accounting scandal.

The turmoil hasn't helped the company's stock. In recent trading, shares were off 95 cents, or nearly 4%, to $23.48. But more important than any short-term fluctuations is the stock's dismal long-term performance, says Hitchcock. Over the last 10 years, the stock has lost about 25% of it value, while the S&P 500 has appreciated by 97%.

Davis, who will step down under a "mutual agreement," will be replaced by corporate controller Robert Cirabisi, who joined the Islandia, N.Y., company in 2000. And that bothers Gary Lutin, an investment banker who has been running an online forum for CA shareholders. "The person who has been given CFO status was there during the period of admitted fraud. That can't inspire much confidence among investors and raises real serious questions about what the board of directors is thinking."