CA Technologies and Compuware Under Review: Application Software Companies Restructure to Survive

Feb 05, 2013, 07:30 ET from

LONDON, February 5, 2013 /PRNewswire/ --

Application software industry is constantly evolving and the influx of new technologies forces the companies to adopt new product mixes. In some cases, such transition may lead to a need for quick adaptation as evidenced by leading application software company CA Technologies (NASDAQ: CA). The company faces changing demand for its mainframe business due to technological innovation. Consequently, it is focusing on alternatives like providing enterprise solutions. Compuware Corporation (NASDAQ: CPWR), on the other hand, is planning to adapt to changing times by cutting costs and disinvesting non-core businesses. StockCall released new technical research on the Application Software industry players CA Technologies and Compuware. Sign up with us today free of charge and read through the complete analysis at

CA Technologies Focuses on Enterprise Solutions

CA Technologies is an attractive income stock with 4 percent dividend yield. The company also reported better-than-expected results for its fiscal third quarter, however it retained its lower outlook for the entire year. The company recently hired ex-CEO of Taleo Corp., Michael Gregoire as its new chief executive officer. The appointment raised some speculation about the company positioning itself as a takeover target. However, no such indication has been given by CA Technologies. The new CEO also has not provided any vision for his future plans and it looks like that it would be business as usual for CA Technologies. Download the free technical analysis on CA Technologies by registering now at

The stock slowed down late last year after cutting back its forecasts. However, it also plans to return up to $2.5 billion to its shareholders by March 31 of 2014. Despite this, the future for the company is a little interesting as its mainframe business is struggling to hold its own in the wake of technological advancements. Similarly, its enterprise solutions business is also slowly getting into a position to generate buzz. Enterprise solutions also have lower margins, so even if CA Technologies is able to make inroad in this segment, it is likely that the growth will be able to offset the impact of slowdown in mainframe business. In order to protect its margins, the company is now looking to curtail its costs.

Compuware Corporation Fends off Acquisition Bid

Compuware Corporation presented better-than-expected quarterly numbers, albeit it beat margins only slightly. However, the company had been at the center of a lucrative buyout deal. The company received $11 a piece offer from Elliott Management Corporation but the offer was summarily declined by Compuware Corporation as it felt that the offer undervalues its potential. Sign up for free and access the complimentary technical analysis on Compuware at

The company is all set to go ahead with its cost-cutting plan spanning next 3 years. Compuware Corporation is looking to slash its costs by $60 million. The cost-cutting will help the company in boosting its bottom-line. It also recently announced payment of 50 cents per share in dividend, which gives it a dividend yield of healthy 4.5 percent. The market welcomed the news and the stock is currently trading above the price offered by Elliott Management.

Compuware Corporation is expected to benefit from the spinning of its cloud storage service unit, Covisint. The company is planning to float an IPO for this purpose. For its third quarter, Covisint increased its revenue 28 percent on a year-over-year basis. Compuware Corporation itself reported better revenue as well as margins.

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