New Accounting Rules Look Good On CANew Accounting Rules Look Good On CA

Computer Associates reported a first-quarter profit of $323 million on revenue of $1.44 billion, according to accounting methods that CA adopted last fall. Under those same accounting rules, CA reported a profit of $201 million on revenue of $1.32 billion a year ago.

Under CA's previous accounting method, the company had a loss of $342 million on revenue of $713 million in its first quarter, ended June 30. This compares with a profit of $23 million on revenue of $1.14 billion a year ago, under the old rules.

The software company has adopted a business model in which it sells software on a subscription basis rather than for a lump sum when the software purchased. The new model prompted the new accounting procedure.

In a teleconference Monday, CA CEO Sanjay Kumar said his company was performing well in U.S. and European markets that he described as "tight." But by any measure, professional services were down, at $81 million, compared with $141 million last year.