Computer Associates to Delay Results, Lowers Revenue Guidance

The effort to restate results for fiscal years 2000 and 2001 prompts other problems for the software maker.
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Embattled software giant

Computer Associates

(CA) - Get Report

on Thursday moved fourth-quarter revenue guidance to the low end of its previous range, and said it will delay reporting results for the quarter and the full fiscal year by as much as two weeks.

The delay was caused by the massive effort devoted to the company's recent restatement of results for fiscal years 2000 and 2001, said Chief Operating Officer Jeff Clarke.

The company has admitted that some executives illegally backdated approximately $2 billion of sales to meet financial targets for some quarters. The resulting scandal forced the

demotion of CEO Sanjay Kumar. A dozen other executives have been fired, and several, including the former CFO, have plead guilty to charges of securities fraud.

In recent trading, CA shares were off 53 cents, or 2%, to $27.25 on heavy volume.

The Islandia, N.Y, company expects revenue for the fourth quarter to be approximately $850 million, compared to a previous range of $845 million to $865 million. Guidance for the full fiscal year was also lowered to $3.28 billion from the previous range of $3.29 billion to $3.31 billion.

Estimates of pro forma quarterly earnings per share were raised to 17 cents to 18 cents from 16 cents to 18 cents, while EPS guidance for the full year remains 60 cents to 61 cents.

Clarke also said CA will revise its previously filed form 10-Qs to defer approximately $4 million of previously recognized revenue in the second quarter of fiscal 2004 and approximately $5 million in the third quarter of fiscal 2004. The revision is due to an adjustment in the way the company calculates subscription revenue. The $9 million in revenue will be recognized in subsequent periods.

"While the overall revenue impact is very small, it speaks strongly to our desire to be precise and thorough in our reporting," he said, in a prepared statement.