CA delivers strong Q3, eyes organic growth

CA Technologies reported a better-than-expected fiscal third quarter, upped its dividend and said it's focusing on organic growth.

The company delivered third quarter earnings of $263 million, or 54 cents a share, on revenue of $1.26 billion, up 10 percent from a year ago. Non-GAAP earnings were 65 cents a share. Wall Street was expecting non-GAAP earnings of 54 cents a share on sales of $1.21 billion.

As for the outlook, CA projected fiscal 2012 (year ending March 31) revenue growth of 6 percent with GAAP earnings of $1.86 to $1.90 a share. Non-GAAP earnings will be $2.21 to $2.25 a share. Wall Street was looking for earnings of $2.15 a share for fiscal 2012.

Separately, CA said it raised its annual dividend from 20 cents a share to $1 a share. The company will also buy back up to $1.5 billion in shares through fiscal 2014.

CEO Bill McCracken noted that the company's strategic plan is coming together and CA will focus on organic revenue growth. That focus is notable given that CA has historically been built via acquisitions.

By the numbers:

• Mainframe revenue in the third quarter was $682 million, up 9 percent from a year ago. Operating profit was $405 million.
• Enterprise solutions sales were $479 million, up 12 percent from a year ago. Operating profit was $59 million.
• Services revenue was $103 million, up 17 percent, with operating profit of $11 million.