The company remained tight-lipped on the status of strategic alternatives it said it was exploring in April. These include the possible sale of the company and job cuts of 5,000, or 6% of its overall workforce.

Revenue for the quarter was unchanged year-to-year and in line with analysts’ forecasts at $3.88bn, including federal sales that jumped more than 13% to $1.37bn.

Some $920m of this came from defense contracts, including major program awards from each of the major armed forces branches. CSC chairman and CEO Van Honeycutt said the company won all its major federal re-competes during the fourth quarter.

But global commercial revenue fell nearly 6% for the quarter to $2.52bn, and CSC’s main US commercial business slid at the same rate, to $1.01bn.

The termination of its Nortel Networks contract, as well as a reduction in CSC’s JPMorgan Chase contract, offset increased business under contracts with clients such as Sun Microsystems and Textron, the company said.

European business sank 11% to $1.13bn. Specifically, the company attributed weak consulting and system integration revenue in Europe to soft markets in several specific countries. But the workforce reduction announced in April, which are will mostly be in Europe, should help rein in costs in the region, CSC said.

Net income for the quarter came in at $199.4m, including Nortel-related charges and asset retirement expenses, less than half of the $411.8m profit it recorded for the same period last year.

But last year’s quarter included $245 from discontinued operations, so on an continuing basis, EPS was $1.08 for the most recent quarter, up from $0.86 per share last year and a few cents ahead of analysts’ expectations of $1.13, according to Thomson Financial.

For the year, CSC reported earnings of $634.0m, or $3.38 per share, above the company’s guidance. Annual revenue for FY2006 was $14.6m, an increase of 4%.

Guidance for Q2 is for EPS in the mid-60 cent range, on revenue between $3.4bn and $3.5bn, a decline from Q1. Full-year guidance is EPS of $3.79 to $3.89 on revenue up 2% to 3% from FY2006.

On its offshore plans, CSC said it expanded its overall offshore headcount by 43% in FY2006, including an increase of 84% in India alone. The company plans to expand to more than 8,000 workers in India by March 2007. It’s currently expanding its infrastructure services site in Chennai, filling a new center in Delhi, and adding a potentially new site in Hyperabad.

And on another hot topic, the UK NHS IT overhaul, CSC said it was faring better than the rest of the pack, such as Accenture, which announced some setbacks in its NHS contract earlier this year.

CSC says it has about half of its contract operational, and has plans in place to account for the product delivery delays of the program’s software supplier, iSoft.

Despite questions from analysts, the company was clearly uninterested in offering any details on the strategic alternatives, which Honeycutt said could be organic growth, acquisitions, share buybacks, or a sale of the company.

Media reports have indicated that negotiations with several interested buyers going back to last October, including private equity groups and fellow services companies HP and Lockheed Martin, fell through.