CA’s financial performance
CA’s (CA) revenue fell at a four-year CAGR (compound annual growth rate) of 2% to $4.2 billion in fiscal 2018, which ended on March 31, 2018. Its net income fell at a four-year CAGR of 6% to $1.1 billion. Its revenue in the first quarter of fiscal 2019, which ended on June 30, 2018, fell 8% to $938 million.
The company’s Mainframe Solutions and Enterprise Solutions segments generated 47% and 46% of the company’s revenue, respectively. Its Services segment generated the rest of its revenue. The segments’ combined net income rose 25% to $320 million.
Forecasts for CA
CA’s revenues for fiscal 2019, fiscal 2020, and fiscal 2021 are expected to be $4.3 billion, $4.3 billion, and $4.4 billion, respectively. Its net incomes for these years are expected to be $1.2 billion each. The stock has “hold” recommendations from eight analysts. Its projected PE multiples are 15.4x, 14.9x, and 14.6x, respectively.
CA against the indexes
At the end of last week, CA had beaten the NASDAQ Composite Index and the S&P 500 Systems Software Index in the last five days, in the last month, in the last three months, in the last year, and year-to-date. The stock closed at a 2% discount to its 52-week high and a 38% premium to its 52-week low at the end of the week.
An impending acquisition and other recent events
In September, CA approved its purchase by Broadcom for a cash consideration of $18.9 billion. CA also announced a partnership with Swisscom aimed at the creation of an advanced open banking hub. CA partnered with SAP (SAP) in October to drive the development and delivery of SAP’s applications.
In August, CA partnered with eight technology companies on the software design of EU General Data Protection Regulation compliance.