CA cuts outlook for year ahead, plans layoffs

CA cuts outlook for year ahead, plans layoffs

Summary: CA's outlook for the fiscal year ahead is light. The company plans to cut workers and replace them with new folks with skills better suited for growth businesses.

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CA Technologies reported a better-than-expected fourth quarter, but cut its outlook for the year ahead and said it would lay off 1,200 employees.

The job cuts will result in a $150 million charge in fiscal 2014 to "to rebalance its resources to better align with its business priorities." The layoffs will largely be completed by the first quarter, the company said. CA added that it will backfill those positions with people who are focused on stronger growth markets such as cloud computing.

CA reported fourth quarter earnings of $242 million, or 53 cents a share, on revenue of $1.15 billion, down 3 percent from a year ago. Non-GAAP earnings in the fourth quarter was 68 cents a share.

Wall Street was expecting CA to report earnings of 55 cents a share on revenue $1.41 billion in the fourth quarter. For fiscal 2013, CA reported earnings $955 million, or $2.07 a share, on $4.64 billion, down 4 percent from the previous year.

As for the outlook, CA said it saw revenue for fiscal 2014 of $4.43 billion to $4.52 billion, down 2 percent to 4 percent from 2013. Non-GAAP earnings for fiscal 2014 will be $2.35 a share to $2.43 a share.

Wall Street was looking for 2014 non-GAAP earnings of $2.53 a share on revenue of $4.66 billion.

By the numbers:

  • For the fourth quarter, mainframe revenue was $620 million, down 1 percent. 
  • Operating profit for that unit was $359 million.
  • Enterprise solutions sales was $432 million, down 6 percent. Operating profit for the fourth quarter was $15 million.
  • Fourth quarter services revenue was $99 million, up 6 percent from a year ago with an operating profit of $10 million.
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CA rival BMC Software, which plans to go private, also reported results. For the fourth quarter, BMC reported $73 million, or 50 cents a share, on revenue of $568.6 million, flat with a year ago. BMC reported fiscal 2013 earnings of $331 million, or $2.13 a share, on revenue of $2.2 billion.

Topics: Enterprise Software, Data Centers

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2 comments
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  • IOW

    "CA added that it will backfill those positions with people who are focused on stronger growth markets such as cloud computing."

    Higher cost workers will be replaced with lower cost workers.
    ye
    • I thought the same thing

      Whenever I hear about layoffs and reorganizing labor. Its all about paying people less to do the same thing. I remember someone once told me that if companies could get away with it they would never keep anyone over 5 years. Except for some key management positions of course.
      JohnnyES-25227553276394558534412264934521