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August 5, 2009

CSC Q1 revenue falls 12.2%, increases FY10 earnings guidance

Earnings per share increases 8%

By CBR Staff Writer

CSC has reported first quarter fiscal 2010 revenue of $3.9 billion, down 12.2% compared to $4.4 billion in the same quarter of 2009. The company reported an operating margin of 6.81% in the first quarter of fiscal 2010, a 46 basis points improvement from the same quarter of the previous year.

For the quarter, diluted earnings per share (EPS) was $0.85, an increase of 8% compared to EPS of $0.79 in the same quarter of the prior year.

In the first quarter, the company’s North American Public Sector (NPS) business reported revenue of $1.52 billion, up 1.7% from the same quarter of the previous year. During the quarter, Business Solutions & Services (BS&S) experienced reductions in discretionary projects and consequently reported revenue decline of 22% to $0.84 billion.

Managed Services Sector (MSS) revenue was $1.56 billion for the first quarter, down 17.6% from the same quarter in 2009.

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The company said that revenue for fiscal 2010 is expected to be $16 billion to $16.5 billion. The benefits realised in the fourth quarter last year and first quarter of 2010, has resulted in a reduction of the full year tax rate. Consequently, the company has increased the full year EPS guidance from $4.20 – $4.30 to $4.80 – $5.

Michael Laphen, chairman and chief executive officer of CSC, said: We remain committed to our revenue guidance for fiscal year 2010. We anticipate modest improvement in the economy which should drive an increase in short-term projects during the second half of our fiscal year. Long-term opportunities in our pipeline position us for growth in both our public and commercial sectors.

CSC has completed the acquisition of BearingPoint’s operation in Brazil, which expands the company’s presence in Latin America. The company also announced cloud computing alliance with Microsoft to improve its business prospects in global cyber security and cloud computing businesses.

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