CA makes a solid start to financial year

But tougher times could be ahead, says the software supplier

CA achieved its third quarter of growth

Software supplier CA has made a solid start to its financial year with an eight per cent increase in first-quarter sales, but says it could soon encounter tougher trading conditions.

CA, formerly Computer Associates, raised revenue from $949m (£466m) in the same period last year to $1bn (£491m), but says this was due in part to slow bookings at the start of the previous financial year, which means that achieving year-on-year growth during the second half of 2008 will be more difficult.

But the company is on track to achieve its goals and total bookings for the year should still rise, says CA chief executive John Swainson.

‘CA has had a good start to its 2008 fiscal year and today’s results represent the third consecutive quarter of solid business performance,’ he said.

‘Revenue, bookings and earnings per share all showed improvement from a year ago and we are making substantial progress in cutting costs and building more effective business processes.’

CA attributes the first quarter gain to growth in subscription revenue and professional services, though the increase was partially offset by decreases in software fees and revenue from maintenance and financing.

Product and services sales were up 48 per cent to $834m (£410m), with the most significant increase coming in the number of large contracts signed. CA has renewed 10 contracts worth more than $10m (£490,000) totalling $202m (£99m).

The software firm expects total sales for 2008 to be about $4bn (£1.9bn).

Earlier this year, an investigation into accounting irregularities at the firm came to an end. Former chief executive Sanjay Kumar is serving 12 years in jail for inflating the company's sales figures in 1999 and 2000.