CA fixes preliminary financial results mistake
Computer Associates International Inc. overstated its annual operating profit by about $140 million when the preliminary financial results for its last fiscal year were reported last month because of what the software vendor is describing as a typographical error.
In a statement issued Friday, Islandia, N.Y.-based CA said a chart entry for diluted operating earnings excluding amortization costs and other special items in the fiscal year that ended March 31 should have read 16 cents per share. That would have resulted in a profit of $90 million. But CA's announcement put the figure at 40 cents per share, or about $230 million.
"The typographical error occurred when the preparer of the press release chart inserted the wrong number from the computation sheet," a CA spokeswoman said via e-mail. The error was discovered last Thursday after officials at CA realized that the four quarterly entries in that category were accurate and didn't add up to the claimed yearly total, she added.
The error comes at a bad time for CA, which is switching to a new form of accounting and has come under media scrutiny for the manner in which it recognizes revenue. But the mistake appears to have been a genuine one, said Richard Ptak, an analyst at Hurwitz Group Inc. in Framingham, Mass.
"Something like this would be too blatant of an act to think they would do it deliberately," Ptak said. "I think it's just an error." CA's final results for its fiscal fourth quarter and the fiscal year as a whole are due to be announced May 22.
» posted by ITworld staff
Computerworld
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