CA stock takes a hit

Shares of Computer Associates International (CA) plummeted 21 percent in trading today, following the company's announcement that revenues will be lower than expected.

CA's stock closed at 48-3/4 a share, down 13 from the previous day's close.

The company announced, after the market's close yesterday, that revenues for the third quarter will fall short of Wall Street's expectations, but profits remain on track.

CA said revenue will remain flat between $1 billion to $1.1 billion for the quarter ending December 31, rather than the consensus of $1.2 billion, the company said. The company posted revenues of $1 billion for the quarter a year ago.

"We are disappointed that European revenues are coming in lower than expected this quarter. We are in the midst of a transition to new client-server platform opportunities while decreasing our dependence on the more mature and slower-growing mainframe software market. This transition has been going much smoother in North America than in the European marketplace," said Sanjay Kumar, president and chief operating officer, in a statement.

Meanwhile, CA expects its quarterly earnings to still reach analysts' estimates of 75 cents a share, excluding a previously announced $598 million acquisition charge for Cheyenne Software, company officials said. The expected quarterly profits represent a 25 percent increase over the same period a year ago.

CA expects to report its quarterly results January 21 after the close of the stock market.