CA Posts Wider Loss On Settlement ChargesCA Posts Wider Loss On Settlement Charges

Computer Associates reported Tuesday a larger net loss for its second quarter, ended Sept. 30, as the costs of settling litigation pulled down earnings.

The mainframe software company reported a net loss of $87 million, or 15 cents per share, compared with a loss of $52 million, or 9 cents a share, a year ago. CA took after-tax charges of $100 million, or 17 cents per share, to settle a shareholder lawsuit against it, and $13 million, or 2 cents per share, to settle a breach-of-contract lawsuit filed by Ray Noorda's Canopy Group Inc. and Center 7 Inc., a software company it owns.

Revenue for the quarter increased 8%, to $833 million. Chairman and CEO Sanjay Kumar said growth in software-contract bookings was helped by higher IT spending in North America, but business was more difficult in Europe. CA forecast revenue of $825 million to $845 million for its third quarter and earnings per share of 2 to 4 cents.

During a conference call with investors, Kumar said an investigation by the Justice Department and the Securities and Exchange Commission into CA's accounting practices is not close to complete. Two weeks ago, CA said an internal audit committee discovered that during the fiscal year ended in March 2000, the company signed contracts after the quarters in which it booked revenue from those contracts. That led to the resignation of three company executives, including CFO Ira Zar.

Kumar said Tuesday that the committee found no evidence of false revenue and cash flows and that CA's current accounting is sound.