CA, BMC cut outlooks, Symantec on target

It's a mixed picture from enterprise software companies as CA and BMC said demand was sketchy. Symantec's outlook was on target.
Written by Larry Dignan, Contributor

CA and BMC Software, two companies that feature data center management applications and are branching into cloud computing, cut their outlooks on weaker-than-expected demand. Symantec said demand was solid.

BMC reported fiscal second quarter earnings of $115 million, or $65 cents a share, on revenue of $556.7 million, up almost 11 percent from a year ago. Non-GAAP earnings for the quarter were 87 cents a share. Wall Street was expecting non-GAAP earnings of 81 cents a share on revenue of $540 million.

Bob Beauchamp, BMC CEO, described the quarter as mixed. BMC is seeing growth in software as a service and cloud management, but total bookings fell 16 percent from a year ago. On a conference call, BMC said public sector spending was soft, deals in Europe were delayed and sales turnover hurt the company.

Amid the sketchy demand picture, BMC cut its outlook. For fiscal 2012, BMC projected non-GAAP earnings of $3.21 to $3.31 a share. Total bookings and revenue growth will be in mid-single digits. BMC was projecting higher sales growth. Wall Street was expecting 2012 earnings of $3.29 a share.

CA had a similar story. The company's fiscal second quarter results were fine, but the outlook was cut. CA reported second quarter earnings $236 million, or 47 cents a share, on revenue of $1.2 billion, up 10 percent from a year ago. Non-GAAP earnings were 51 cents a share. Wall Street was looking for non-GAAP earnings of 49 cents a share on revenue of $1.19 billion.

However, CA CEO Bill McCracken also saw trouble ahead. "We achieved our objectives for earnings per share, cash and margin for the second quarter," said McCracken. "However, we were not pleased with one area, new product sales, relative to our expectations. As a result, we have revised our revenue outlook to reflect the shortfall in new product sales and the macroeconomic environment."

McCracken added that CA's bet on cloud computing and other investments were the right moves to make strategically. AS for the outlook, CA sees fiscal 2012 delivering revenue growth of 5 percent to 6 percent, down from previous expectations of 6 percent to 8 percent growth. Non-GAAP annual earnings will come in with growth of 7 percent to 10 percent.

On a conference call with analysts, McCracken said CA will look to sell more software to its 1,000 largest accounts, bolster its sales force and focus on markets with "the most resilient IT spending." "The next step for CA Technologies is acquisition of new customers," said McCracken.

Symantec indicated that demand for its security and storage software remained strong despite a mixed economic picture. Symantec's second quarter earnings were in line with estimates as was the company's outlook.

The company reported second quarter net income of $182 million, or 24 cents a share, on revenue of $1.68 billion, up 14 percent from a year ago. Non-GAAP earnings were 39 cents a share.

As for the outlook, Symantec said its third quarter non-GAAP earnings will be 40 cents a share to 41 cents a share on revenue of $1.7 billion to $1.71 billion. That outlook matched Wall Street estimates.

Enrique Salem, CEO of Symantec, said that the company continues to "see good demand for our products and services across the portfolio."

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