CA continues six-year black run

Software vendor looks around for suitable services partner. Cath Everett reports on its progress.

Computer Associates (CA) has turned in its 25th consecutive quartererett reports on its progress. of double-digit operating earnings, amid speculation it was on the verge of making another acquisition.

The two companies that have been hotly tipped for a CA takeover were Computer Horizons, which specialises in year 2000 consultancy and outsourcing, and Voice Control Systems, a $14.4 million turnover company that sells voice recognition systems.

One observer claimed Computer Horizons was the most likely purchase following CA's failed hostile takeover attempt of Computer Sciences Corporation (PC Dealer,11 March).

CA finally went public on a cash tender offer at a price of $108 per share - a total of $9 million - for all outstanding common stock and preferred share purchase rights of CSC on 17 February. Since the failed takeover, the vendor has repeatedly stated that it intended to buy a series of other smaller services players.

Charles Wang, CA CEO, addressing the company's annual conference this month, confirmed plans to set up a service organisation.

For its fourth quarter ended on 31 March, CA saw revenue rise by 22 per cent to $1.5 billion. Net profit was $422.8 million, excluding the $33.8 million pre-tax charge related to the CSC tender offer, compared with the pro forma income of $336 million in the same period last year.

For the full fiscal year, the software giant saw turnover increase 17 per cent to $4.7 billion, while net profit rose 24 per cent, excluding the one-off charge, to $1.2 billion.

Shares of CA have been at an all-time high as the company attempts to achieve a target price during the next four months.