Contact Us

PW Case Review Form
*    Denotes required field.

   * First Name 

   * Last Name 

   * Email 


   * Please describe your case:

What injury have you suffered?

For verification purposes, please answer the below question:

No Yes, I agree to the Parker Waichman LLP disclaimers. Click here to review.

Yes, I would like to receive the Parker Waichman LLP monthly newsletter, InjuryAlert.

please do not fill out the field below.

CA Comfirms Fed Subpoena

Shares Tumble 10% After Net Loss Report

Jan 23, 2003 | Newsday

Federal investigators last month issued their first subpoena to Computer Associates International Inc. in the ongoing investigation of its accounting practices, the company confirmed yesterday.

The news came as CA shares dropped $1.55, more than 10 percent, in late trading yesterday after the company's financial statement appeared on its Web site around 15 minutes before the market closed. Despite reporting that it narrowed its loss to $44 million on a 4 percent increase in revenue, CA shares dropped to $13.20 because revenue of $778 million fell short of the concensus estimate by Thomson/First Call of $783 million. "The revenue number was light," said an analyst who asked his name not be used.The December subpoena, which was issued after the Securities and Exchange Commission and the Department of Justice had subpoenaed 10 CA clients, followed an appeal by CA to investigators that they approach the company rather than its clients for information about past contracts.

But it's unclear whether subpoena was the result of that request or a racheting up of the year-long investigation into the company's accounting practices.

"We approached the government after we heard about [customer subpoenas] and invited them to ask us instead of our customers for whatever additional information like this they need to continue their investigation," said chairman and chief executive Sanjay Kumar, on a conference call with analysts last night. "So in response they have formally asked us for this additional information, and we are gathering up the contracts and documents, and will continue to provide the government with any additional information they want."

CA spokesman Dan Kaferle said, "We don't see the issuing of the subpoena as an indication of any finding or determination in the investigation." The subpoena was issued by the Justice Department.

Separately, Kaferle said the early release of the financials yesterday was the result of a "software glitch," that the company has since corrected. The financial report was supposed to be released after the market close. CA shares regained some footing in after-hours trading, closing at $14.07.

The loss for the period ended Dec. 31, 2002, compared to a deficit in the previous year's third quarter of $231 million.

In a SEC filing last night the company explained, "Cautious capital spending by many of our existing and potential customers associated with weak conditions in the overall economy and the [information technology] industry adversely impacted revenue in the third quarter of fiscal year 2003."

CA cut expenses in the quarter by $33 million, much of it associated with an elimination of staff. It had 1,300 fewer employees in the 2002 quarter versus the previous year, including 725 from the divesture of its interBiz unit, 80 fewer following the recent sale of its banking products group, and an additional 495 due to what it termed "attrition." For the first nine months of fiscal 2003, CA saw $173 million in savings from headcount reductions.

For the quarter, CA also realized $21 million in foreign exchange gains and $8 million from the sale of the banking products group during the quarter.

Related articles
Parker Waichman Accolades And Reviews Best Lawyers Find Us On Avvo