COMPUTER ASSOCIATES POSTS THIRD QUARTER FINANCIAL RESULTS; Client/Server Revenue Increases 31%.

ISLANDIA, N.Y.--(BUSINESS WIRE)--Jan. 19, 1999--Computer Associates International, Inc. (NYSE: CA) today reported financial results for its third fiscal quarter.

For the quarter ended December 31, 1998, revenue was $1,361,141,000, up 10% versus the $1,239,012,000 reported in the previous year. Client/Server revenue was $621 million, up 31% from the $474 million in the prior year. Third quarter earnings per share (diluted), were $.64, compared to $.60 a year ago, an increase of 7%.

For the nine months ended December 31, 1998, revenue was $3,624,118,000 compared to the $3,251,877,000 reported in the first nine months of last year. Revenue for the nine months increased by 11% from the prior year. Client/Server revenue for the nine months was $1.7 billion, up 30% versus the $1.3 billion reported last year. Earnings per share (diluted), excluding special charges, were $1.49, an increase of 10% over the $1.36 for the prior fiscal period.

All per share amounts have been adjusted for the Company's three-for-two stock split effective November 5, 1997.

"Computer Associates performed well during the quarter," said Charles B. Wang, CA chairman and chief executive officer. "Our business showed solid growth during the quarter and the software marketplace as a whole remains vibrant as technology continues to play a proportionally larger role for our clients in their ability to compete. With the acceleration of the Internet and an increasing reliance on the systems and networks that support e-commerce initiatives, CA is uniquely positioned to benefit as the leading independent provider of systems and network infrastructure software."

"We are pleased with the 31% revenue increase in our client/server business," said Sanjay Kumar, CA president and chief operating officer. "We continue to be the only independent software vendor that offers a comprehensive array of cross-platform integrated products covering all aspects of enterprise management. Our security, storage management and desktop management solutions have been especially well received by our clients. Professional services, an area of substantial opportunity for CA, experienced a revenue increase of 97% to $77 million versus last year. In other areas, CA's international revenue increased 19% with particular strength from CA's European units. CA's balance sheet continues to be solid, paced by operating cash flow of $467 million in the December quarter."

In December, CA announced Neugents(tm), its revolutionary neural network technology. Neugents enable an entirely new generation of business applications that can not only analyze conditions in business markets and technical environments, but also predict changes in those conditions and suggest courses of action to proactively capitalize on opportunities and/or avoid potential problems. IndustryWeek magazine chose Neugents as one of 25 winners of the "Technology of the Year" award for 1998.

Other third quarter highlights:

* CA unveiled Unicenter TNG Framework for OS/390, adding IBM's premier enterprise server operating systems to more than 40 hardware and software platforms already supported by Unicenter TNG. CA also announced new software agents that extend Unicenter TNG to encompass OS/390 applications and subsystems. In addition, CA Global Professional Services (GPS) introduced a wide-ranging OS/390 services program.

* To bolster its 3D technology leadership, CA acquired privately-held Viewpoint DataLabs International, Inc., the world leader in 3D digital content creation and publishing, and privately-held 3Name3D, a leading 3D design and production firm which is now part of the new ViewPoint subsidiary. CA is using this revolutionary technology to further advance the capabilities of leading edge products such as Unicenter TNG and Jasmine.

* CA announced Unicenter TNG and Jasmine support for Sun Microsystems' new Java Development Kit. CA and Sun also extended their long-standing relationship in conjunction with Sun's introduction of the Solaris 7 operating environment.

* CA and Hitachi announced the first major software and hardware collaboration to offer customers an end-to-end storage management solution across the entire enterprise.

* CA extended its leadership in emerging Storage Area Network (SAN) technology by announcing support for Compaq's StorageWorks Enterprise Backup Solution. CA's newly released ARCserveIT and the Enterprise Library Option (ELO) will play integral roles in the deployment of Compaq's Enterprise Backup Solution and enhanced Storage Management Options.

* Underscoring its commitment to increasing revenue through the channel, CA signed strategic distribution agreements with Tech Data, Ingram Micro and Merisel for CA's Enterprise Edition products. Merisel also designated Unicenter TNG as a strategic management platform and premier enterprise management solution.

* Intelligent Enterprise magazine, a leading IT publication, selected Unicenter TNG as the top-performing IT solution for systems management and Jasmine as the premier object-oriented database solution.

* CA introduced the Linux Edition of Ingres II with an innovative Open Beta program that enables clients to leverage the popular, free UNIX platform to build core business applications.

* FORTUNE magazine cited CA as one of the "100 Best Companies to Work for in America." The list was compiled through interviews with more than 20,000 selected employees at scores of companies nationwide.

* CA acquired LDA Systems, Inc., a leading information management consulting and services firm that provides enterprise-wide solutions integrating client/server, mainframe, midrange and Internet technologies, and integrated the company into GPS.

* CA acquired Aventura Systems ASA, a leading provider of e-commerce and electronic data interchange solutions based in Oslo, Norway. The acquisition provides CA with strong business-to-business electronic commerce solutions and expertise, and strengthens the presence of GPS throughout Scandinavia, where Aventura has an established customer base.

* GPS formed a Business Assessment and Consulting Group, giving CA clients access to high-end business and IT process re-engineering expertise, directly supported by GPS-associated design, implementation and outsourcing services as well as by CA's broad technology portfolio.

* To further support global customers based in Japan or doing business there, CA announced a large-scale launch of industry-leading solutions localized for the Japanese corporate IT market, including the Japanese version of the Unicenter TNG SAP R/3 Option.

* CA and Samsung SDS established a far-reaching strategic alliance to deliver robust, integrated enterprise management capabilities worldwide. Samsung endorsed and is reselling Unicenter TNG as its preferred enterprise management solution, and specially-trained Samsung consultants are partnering with CA's GPS to provide enterprise management services to corporate customers worldwide.

* Other companies which selected Unicenter TNG to manage their computer environments during the quarter included Hormel Foods, 1-800-FLOWERS, Payless ShoeSource, Polytechnic University, Anthem, Mekorot, Cellcom, Oakland County, Michigan, West Interactive, Swiss Electronics and Microtechnology Center, Universita Cattolica del Sacro Cuore, Central Illinois Light Company, Hurley Consulting Associates, BSN Bank...

* CA and the Habitat for Humanity joined forces to construct affordable homes in West Chicago for families in need. CA employees volunteered to donate their time and energy to build these homes. They also pledged monetary contributions to the project, which will be used to purchase building materials. These donations will be matched 200 percent by CA's Matching Charitable Gifts Program.

* Recognizing that employees choose to build their families in many different ways, CA instituted an innovative program that reimburses employees up to $5,000 for each child they adopt. Under the program, employees are reimbursed for expenses directly related to adoption, including certified agency and placement fees; legal expenses; various medical costs; temporary foster care; and transportation. The program is open to all full-time CA employees in the United States and is the latest addition to CA's comprehensive benefits package.

Computer Associates International, Inc. (NYSE: CA), the world leader in mission-critical business computing, provides software, support and integration services in more than 100 countries around the world. CA has more than 13,000 employees and had revenue of $5.1 billion in calendar year 1998.

For more information about CA, please call 516-342-5224 or email [e-mail]. CA's World Wide Web address is www.cai.com.

All referenced product names are trademarks of their respective companies.

Statements in this release concerning the Company's future prospects are "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. There can be no assurances that future results will be achieved, and actual results could differ materially from forecasts and estimates. Important factors that could cause actual results to differ materially include: the significant percentage of CA's quarterly sales recorded in the last few days of the quarter, making financial predictions especially difficult and raising a substantial risk of variance in actual results; the emergence of new competitive initiatives resulting from rapid technological advances or changes in pricing in the market; the risks associated with new product introductions as well as the uncertainty of customer acceptance of these new or enhanced products from either CA or its competition; risks associated with the entry into new markets such as professional services; delays in product delivery; the ability to recruit and retain qualified personnel; negative implications from the "Year 2000" or "Euro" implementation technology problem, including customer indecision, purchasing delays or budget re-allocations; business conditions in the client/server and mainframe software and hardware markets; use of software patent rights to attempt to limit competition; assimilation of business or technology acquisitions; fluctuations in foreign currency exchange rates; the volatility of the international marketplace, including the recent Asian and Latin American turmoil; and other risks described in filings with the Securities and Exchange Commission.

                COMPUTER ASSOCIATES INTERNATIONAL, INC.
                 Earnings Before Q1 Stock Plan Charge
                 (in thousands, except per share data)
                              (Unaudited)

                         Three Months             Nine Months
                       Ended December 31,       Ended December 31,

                      1998          1997        1998 (A)      1997

Revenue            $1,361,141    $1,239,012  $3,624,118    $3,251,877
Income before taxes   567,396       543,859   1,348,321     1,228,096
Net Income            354,623       339,912     842,701       767,560

Basic Earnings per
 Share                   $.66          $.62       $1.54         $1.41
Shares used in
 computation          538,421       546,423     548,171       545,640

Diluted Earnings per
 Share                   $.64          $.60       $1.49         $1.36
Shares used in
 computation          554,015       567,990     565,336       566,140

(A)  Excludes the non-cash $1,071,413,000 pre-tax ($674,992,000
     after-tax) charge taken in the June 1998 quarter associated with
     the vesting of shares under the 1995 Key Employee Stock Ownership
     Plan (the "1995 Plan"), as previously disclosed. The shares are
     subject to seven year transfer restrictions in accordance with
     the 1995 Plan.


                Condensed Consolidated Income Statement
                 (in thousands, except per share data)
                              (Unaudited)

                       Three Months                Nine Months
                    Ended December 31,           Ended December 31,

                    1998         1997            1998        1997

Revenue           $1,361,141   $1,239,012    $3,624,118   $3,251,877
Income before
 taxes               567,396      543,859       276,908    1,228,096
Net Income           354,623      339,912       167,709      767,560

Basic Earnings per
 Share                  $.66         $.62          $.31        $1.41
Shares used in
 computation         538,421      546,423       548,171      545,640

Diluted Earnings per
 Share                  $.64         $.60          $.30        $1.36
Shares used in
 computation         554,015      567,990       565,336      566,140