CA Inc. (CA) reported fourth quarter 2010 EPS of 37 cents, exactly same as the Zacks Consensus estimate.

Revenue

The company reported fourth quarter 2010 revenue of $1.10 billion, up 7.0% from $1.03 billion reported in the year-ago quarter. This is attributed to revenue growth across all geographies, as well as all business segments except professional service.

In terms of business segments, Subscription and Maintenance revenue for the fourth quarter, stood at $968.0 million, up 6.0% from $913.0 million reported in the year-ago quarter.

Professional Services revenue was $76.0 million, down 10.0% from $84.0 million reported in the same quarter last year. Software Fees and Other generated revenues of $59.0 million, growing 55.0% from $38.0 million reported in the year-ago quarter.

The growth in software revenue may be attributed to a strong quarter in the company’s new software products, especially in Service Management and Assurance; and Identity and Access Management. 

On the basis of geographic segments, North America generated revenue of $670.0 million, up 7.0% from $625.0 million reported in the year-ago quarter, while International revenue (excluding America) was $433.0 million, up 6.0% from $410.0 million reported in the year-ago quarter.

Bookings

Total bookings in the fourth quarter were $1.448 billion, down 4.0%, compared to the prior-year period. During the fourth quarter, the company signed 21 new license agreements worth more than $10.0 million each for a total of $632.0 million, compared with 21 license agreements totaling $736.0 million in the fourth quarter of 2009.

Operating Results

On a GAAP basis, operating income for the fourth quarter stood at $232.0 million (21% of revenue), up 28.9% from $180.0 million (17.4% of revenue) reported in the year-ago quarter.

Excluding special items such as purchased software amortization, intangibles amortization, previous year restructuring and other costs, and including hedging gains and losses, the non-GAAP operating income for the quarter stood at $257.0 million (23.0% of revenue), down 14.0% from $225.0 million (21.8% of revenue) reported in the year-ago quarter.

Net Income on a GAAP basis, for the fourth quarter of 2010 was $101.0 million or $0.19 per share, versus a net income of $65.0 million or $0.13 per share reported in the year-ago quarter.

Excluding special items, non-GAAP net income in the fourth quarter was $175.0 million or $0.34 per share, versus a net income of $169.0 million or $0.31 per share reported in the year-ago quarter. Excluding stock-based compensation, the Non-GAAP EPS for the quarter was $0.37.

Balance Sheet and Cash Flow

The company reported $636.0 million of cash from operating activities in the recently concluded quarter, compared to $648.0 million in the year-ago quarter. Days Sales Outstanding (DSOs) were also up slightly compared to the year-ago quarter. 

Cash and cash equivalents at the end of the fourth quarter was $2.58 billion, while long term debt (including the current portion) was $1.54 billion. This apart, the company acquired Nimsoft, Inc. during the recently concluded quarter for an approximate value of $350 million in an all-cash transaction.

Guidance

For fiscal year 2011, management expects total revenue growth in the range of 3% to 5% at current exchange rates; translating to a revenue of $4.50 billion to $4.60 billion. Earnings per share on a GAAP basis are expected in the range of 5% to 11%, which translates to earnings per share of $1.56 to $1.64, while non-GAAP earnings per share are expected in the range of $1.87 to $1.95.

The company performed well in most of its business segments, and across geographies. This apart, the company also delivered significant growth in its top-line and bottom-line. We believe the revival in the macroeconomic scenario and revival in IT spending will enable the company to deliver decent numbers in the upcoming quarters.

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