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Tax Benefit Narrows Loss For CA

It reported a net loss of $96 million, but its loss from continuing operations, before an income tax benefit, was $185 million.
An income tax benefit narrowed Computer Associates International Inc's loss dramatically in the second quarter.

The company reported Wednesday a net loss of $96 million, or 16 cents per share, but its loss from continuing operations, before an income tax benefit, was $185 million. Its net loss for the same period last year was $90 million.

Analysts had expected earnings per share of 16 cents.

The company reported revenue of $855 million, up from $803 million in the same period last year.

The business software company, based in Islandia, N.Y., has been beset by accounting woes that caused it to restate financial results from 2000 and 2001, criminal investigations and guilty pleas from four top officers

The company's former CEO, Sanjay Kumar, was indicted in September for securities fraud and obstruction of justice and is awaiting trial.

The same day Kumar was indicted, the company agreed to pay $225 million to shareholders in a settlement letting it defer criminal prosecution. Under the unusual deal, an outside monitor will track the company's financial reporting while it makes three restitution payments of $75 million to shareholders over 18 months.

The SEC said that during the company's 2000 fiscal year, Computer Associates ``prematurely recognized'' more than $1.4 billion in revenue from at least 116 contracts that had not yet been signed.

The company said it had billions of dollars in annual revenue in the late 1990s. Reported revenues plunged after the company changed its accounting practices in the face of increased outside scrutiny.

Its financials remain so hard to understand that New York Newsday reported Wednesday the company would hold tutorials for investors and analysts trying to get a handle on its financial status.

For the first six months of the year, the company reported a loss of $43 million on $1.72 billion in revenue. That's narrower than its loss of $82 million on $1.59 billion in revenue for the same period last year.

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