For the quarter ended December 29, CSC posted preliminary revenue of $3.64bn, up slightly from $3.58bn for the same period last year. Earning per share came in at $0.85, excluding special items. Analysts had been looking for EPS of $0.83 on revenue of $3.63bn, according to Thomson Financial. But including charges, EPS was $0.65 for the quarter, due to restructuring-related job cuts that cost the company $42m on a pre-tax basis, or $0.20 per share.
The company said lower outsourcing demand in US and Europe dragged down commercial revenues, and systems integration and consulting business was slow in Europe and in certain service lines in the US too.
Overall, third-quarter commercial revenue was down just slightly to $2.34bn from $2.35bn a year ago, buoyed in part by solid growth in Asia and Australia, CSC said. CSC’s federal business continued to perform well, rising 6.2% to $1.3bn on the quarter. Bookings stood at $1.6bn, with roughly half coming from US federal work and the other half from commercial clients.
Guidance for the fourth quarter includes EPS of $1.41 to $1.51 on sales of $4.1bn to $4.2bn. For the full year, the company maintained its outlook of EPS between $3.71 and $3.81, on revenue up 2% from the previous year. But the company warned that annual earnings would end up in the low end of guidance. Analysts aren’t quite as optimistic, looking for EPS of $1.46 for Q4 and $3.61 for the full year.
CSC announced the results after market close. But the upbeat guidance and before-items earnings helped send shares up 4% to $55.35 in after-hours trading.
