CA Surpasses Q4 Earnings Estimates, Revenues Increase Y/Y
Zacks Investment Research | May 08, 2018 11:02PM ET
CA Inc. (NASDAQ:CA) fourth-quarter 2018 earnings topped the Zacks Consensus Estimate whereas revenues came in line with the same.
The company posted non-GAAP earnings (excluding stock-based compensation and other one-time items) of 62 cents per share, surpassing the Zacks Consensus Estimate of 60 cents. Further, reported earnings witnessed a year-over-year increase of 15%.
Quarter Details
CA’s reported revenues of $1.083 billion increased 7% on a year-over-year basis. On a constant currency basis, revenues were up 4% year over year.
The year-over-year revenue growth was mainly attributable to Mainframe new sales, driven by the company’s ongoing innovations and robust Mainframe hardware cycle. Management was positive about the impressive performance of the company’s Mainframe Operational Intelligence and Dynamic Capacity Intelligence solutions.
With security being one of the key areas in recent times, the company witnessed a surge in demand for its recently launched Trusted Access Manager for Z, a Mainframe solution. Additionally, a similar solution in the Enterprise Solutions segment, named Privileged Access Management or PAM saw new sales growth of around 50%.
Revenues from Subscription and maintenance (77.5% of total revenues) increased 3% and revenues from Professional Services (7.5% of total revenues) were up 5% from the year-ago quarter. Software fees and other revenues (15% of total revenues) surged 32%.
Moreover, on a segment basis, revenues from CA’s Mainframe Solutions increased 3% on a year-over-year basis to $549 million. Revenues from Enterprise Solutions jumped 13% on a year-over-year basis to $453 million, while Services revenues increased 5% to reach $81 million.
North America and International revenues increased 5% and 12%, respectively, on a year-over-year basis. The company witnessed 7% increase in total bookings.
CA reported non-GAAP income before interest and income taxes of $366 million, up 15% year over year. As a percentage of revenues, non-GAAP income before interest and income taxes were up 200 basis points (bps) on a year-over-year basis to 34%.
The company’s non-GAAP net income was approximately $258 million compared with $227 million in the year-ago quarter.
CA exited the quarter with cash and cash equivalents of $3.405 billion compared with $2.971 billion in the previous quarter. The company’s total long-term debt (net of current portion) came in at $2.514 billion. During the quarter, the company generated $548 million of cash flow from operational activities.
During the quarter, the company distributed dividend worth $107 million to its shareholders. As of Mar 31, 2018, the company has approximately $487 million remaining under its current stock repurchase program.
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Fiscal 2018 Snapshot
CA reported revenues of $4.235 billion, up 5% from the previous fiscal. The company reported earnings of $2.59 per share that increased 4% from fiscal 2017. Management stated that the company recorded revenue growth for the second consecutive year in fiscal 2018.
During fiscal 2018, the company repurchased around 5 million shares for approximately $163 million.
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