Kaufman Bros. Ups Earnings Forecasts for Computer Associates

Analyst Kevin Buttigieg increased his EPS outlook based on the company's improved expense management

Computer Associates (CA ) shares rose after it reported second-quarter earnings, and raised fiscal year 2003 EPS guidance to $0.14-$0.16. Kaufman Bros. increased its estimates on the news.

Analyst Kevin Buttigieg tells S&P MarketScope that the company's $394 million second-quarter deferred revenue additions were in line with his estimate, and up sequentially from $322 million. He says sequential deferred revenue additions is a key metric to gauge CA's performance. He sees fourth-quarter deffered revenue additions $100 million higher sequentially. He also noted that third-quarter cash flow from operations should be strong.

The analyst raised EPS estimates from $0.13 to $0.16 for fiscal year 2003 (ending March), and from $0.34 to $0.35 for fiscal year 2004, based on the company's improved expense management. He maintains a hold rating on the shares.

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