July 27 (Bloomberg) -- CA Inc., a maker of software for managing information technology, fell the most in more than a year after the company cut its annual revenue forecast.
CA dropped 7.2 percent to $24.43 at the close in New York, the biggest decline since May 2011. The shares have gained 21 percent this year.
Sales will climb 1 percent to 2 percent this year, reaching $4.7 billion to $4.8 billion, Islandia, New York-based CA said yesterday in a statement. The company had projected a rise of as much as 4 percent for the fiscal year, which ends in March.
Chief Executive Officer Bill McCracken said on a conference call that a sluggish economy and a business reorganization led to a slow start for the year. CA, once focused on mainframe software, has been expanding in cloud computing, where it faces competition from VMware Inc. and Microsoft Corp.
“I am not satisfied with our top-line performance,” McCracken said. “What we did not adequately plan for in the first quarter was the level of disruption our new customer segmentation efforts would cause in the sales force, and the impact it would have on our productivity in large, existing accounts.”
First-quarter revenue fell 2 percent $1.15 billion, the company said. That missed the $1.18 billion predicted by analysts on average, according to data compiled by Bloomberg. Net income from continuing operations rose to $240 million, or 51 cents a share, from $228 million, or 45 cents, a year earlier. Profit excluding some items was 63 cents a share, topping the 61-cent average estimate.
The company, formerly known as Computer Associates Inc., has expanded its dividend and buyback plan. CA said in January that it would return $2.5 billion to shareholders by March 31, 2014. Taconic Capital Advisors LP had urged the company to boost shareholder returns after the hedge fund acquired a 5.1 percent stake.
CA is seeking a replacement for its 69-year-old CEO, who plans to retire. McCracken, who had served as CA’s chairman, took the reins after John Swainson stepped down at the end of 2009. McCracken has no specific retirement date, the company has said.
To contact the reporter on this story: Sarah Frier in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Nick Turner at email@example.com