Poor Euro sales hit CA in shock Q3 shortfall

Direct seller Computer Associates (CA) has issued a shock profits warning, blaming lower than expected sales in Europe. It does not expect revenues to be back on track until fiscal 1998.

The software giant warned that it expects to generate Q3 sales of $1 billion to $1.1 billion. This compares with $1 billion turnover in the comparable quarter last year. Analysts had expected to see turnover of $1.2 billion.

But the firm anticipates hitting analysts' average earnings estimate of 75 cents per share. CFO Doug Robinson said: 'The shortfall was due to a slower than planned transition in European revenues from mainframe to client/server software.

'Our European sales reps are not quite as experienced in selling client/server as opposed to mainframe software, but they are learning the hard way.'

CA also plans to open up to five software demonstration centres in Europe over the next 12 months, with the first planned for the London region.

Robinson said CA would make progress in its March and June quarters, but would not be back to where it should be until fiscal 1998.