CA Records Subpoenaed
Fed Accounting Probe Continues; Software Maker Posts Smaller Quarterly Loss, Tops TargetJan 23, 2003 | CNN/Money Federal investigators have subpoenaed records from Computer Associates Inc. as part of an ongoing probe into the software provider's accounting practices, according to a published report.
The Wall Street Journal reported Thursday that the records subpoenaed last month by the U.S. Attorney's office in Brooklyn, N.Y., include customer contract records and other license information.
Sanjay Kumar, the company's chairman and CEO, told investors during a call to discuss recent results that the Justice Department and Securities and Exchange Commission investigators had "formally asked" the company for information on "about 10" software deals.
The company also reported a narrower loss for the company's third fiscal quarter, as net revenue rose 4 percent. The company's earnings excluding special items edged forecasts.
Shares of Computer Associates rose to $13.90 in after-hours trading from Wednesday's regular-day trading close of $13.40. The stock was down more than 10 percent during regular trading.
The company said there were signs of improvement in the economy, although customers continued to be cautious on technology spending.
For the 2003 fiscal third quarter, ended Dec. 31, the maker of software for mainframe and networked systems reported a net loss of $44 million, or 8 cents a share, compared with a loss of $231 million, or 40 cents a share, the prior year.
Revenue for the company, which is the subject of two federal investigations into its accounting practices, rose to $778 million from $747 million. Computer Associates had said it expected revenue in the range of $770 million-to-$790 million.
Excluding acquisition-related amortization, the company reported a profit of 5 cents a share, compared with its guidance in October for operating earnings in a range of 4 cents-to-5 cents a share. Analysts surveyed by earnings tracker First Call had a consensus earnings- per-share forecast of 4 cents on that basis, and the earnings tracker puts CA's year-ago EPS at 71 cents.