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November 9, 2011

CSC Q3 revenue grew marginally to $3.97bn

The company posted new business awards of $6.6bn for the quarter

By CBR Staff Writer

CSC has reported revenue of $3.97bn for the third quarter of 2011, up 1% compared to $3.94bn in the same quarter previous year.

The company’s pre-tax margin was -72% compared with 6.23% from the previous year, while operating income margin was -1.89% which included the adverse impact of the US Government settlement and the recently completed iSOFT acquisition.

On a pro forma basis, the company posted operating income margin of 5.56% which compares to 7.75% for the prior year.

Free cash flow for the quarter was negative $268m, compared to last year’s free cash flow of $178m, CSC said.

New business awards of $6.6bn for the quarter resulted in a half year increase of 13% above last year, while on a year-to-date basis, new business awards were approximately $8.9bn compared to $7.9bn in the previous year.

CSC chairman, president and chief executive officer Michael Laphen said the first half total bookings of $8.9bn is encouraging and reflects the investment we have made in our sales organisation.

"With respect to the bottom line, MSS is a turnaround story and as previously announced we have made several organisation and process changes aimed at accelerating improvements," Laphen said.

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"During the quarter our equitable settlement with the US government was finalised, resulting in a $1bn incremental contract value, a cash payment to the company of $277m and a non-cash pre-tax charge of $269m."

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