CA Cuts Losses, But Revenue DipsCA Cuts Losses, But Revenue Dips

Computer Associates reported a drop in revenue for the third quarter, but a 32% improvement in losses. For the quarter ended Dec. 31, the Islandia, N.Y., company said Tuesday that revenue dropped 4% to $749 million, from $783 million for the same period a year ago. CA lost 32% less than a year ago, reporting it was $231 million, or 40 cents a share, in the red, compared with $342 million, or 59 cents a share.

CA cut its losses while making major changes in its sales operation, pricing, and accounting. The company is now recognizing revenue when it comes in and letting customers pay in ways that spread payments out over years.

Chief executive Sanjay Kumar sees enterprise management, storage management, and security as high-growth areas. He didn't see any spurt in IT spending in the quarter passed and is hopeful for a modest increase in IT spending in the year ahead. While cautious in his evaluation, Merrill Lynch financial analyst Peter Goldmacher gave CA credit for cutting losses during difficult times. "Things could be getting better for these guys," he says. "The sales model is working better for them."