For the third quarter (ended December 29):

Revenues were $2.7 billion, a 12.9% increase over fiscal 2000 (or approximately 19% in constant currency);

Earnings, before special items, increased 9.6% to $122.9 million;

Earnings per share (diluted), before special items, were 72 cents, a 9.1% increase versus fiscal 2000’s 66 cents;

Net income and earnings per share (diluted) were $65.6 million and 38 cents, respectively;

and announced major new business awards were $1.8 billion.

For the nine months (ended December 29):

Revenues were $7.6 billion, up 12.2% over the comparable nine-month period of fiscal 2000 (or approximately 17% in constant currency);

Earnings, before special items, increased 13.1% to $327.9 million;

Earnings per share (diluted), before special items, were $1.92, a 12.3% increase over the $1.71 for last year’s comparable period;

Net income and earnings per share (diluted) were $270.6 million and $1.58, respectively;

Announced major new business awards totaled $9.4 billion.

We are pleased with our financial performance for the third quarter during a challenging and turbulent period for IT service providers, said Van B. Honeycutt, CSC’s chairman, president and chief executive officer. Our breadth of services delivered over various geographic markets has been a significant factor in helping us to successfully navigate in this environment and to achieve this healthy 13% revenue increase. The strong revenue growth resulting from our federal government vertical market, coupled with the continuing strength in commercial outsourcing, were the principal contributors to our increased quarterly revenue performance.

The third quarter’s results were impacted adversely by the effects of currency, severance costs associated with headcount reductions in our global IT consulting practices and lower than anticipated healthcare market software licensing sales late in the quarter. We have responded to these market factors by swiftly implementing additional cost containment activities, Honeycutt said.

As previously announced, the acquisition of Mynd Corporation closed during December and that transaction was immediately accretive as a result of the combination with our financial services industry vertical, Honeycutt added. We are ahead of last year’s major new business award pace, having announced $9.9 billion so far in the current fiscal year, and with a strong opportunity pipeline in both the commercial and federal markets, we anticipate closing out another year of solid results.

The third quarter special items of $84.2 million principally consisted of the restructuring of CSC’s global financial services activities resulting from the acquisition of Mynd Corporation and final resolution of items from operations previously sold or phased out.

BUSINESS RESULTS

For the third quarter, global commercial revenues grew 11.1% (or approximately 19% in constant currency), to $2 billion compared with $1.8 billion in last year’s third quarter. An increase in U.S. commercial revenue of 10.5% to $999.6 million from last year’s $904.6 million, and an increase in non-European international revenue of 22.1% (or approximately 36.2% in constant currency) to $314.2 million from last year’s $257.4 million, contributed to this performance. European revenue was $703.4 million, up 7.5% (or approximately 24.2% in constant currency) from last year’s $654.3 million. The excellent local currency revenue growth in Europe was predominantly driven by outsourcing activities.

Revenue derived from CSC’s U.S. federal government activities continued to show significant growth, increasing to $647.5 million, up a strong 19.1% from the $543.8 million recorded in last year’s third quarter. Both civil agencies and Department of Defense (DoD) activities generated double-digit revenue growth over the comparable period last year. CSC’s civil agencies business rose 22.2% to $248.1 million, up from $203.1 million last year, aided by continued increases in revenue from the IRS Modernization efforts, GSA activities and other task order contracts. DoD revenue climbed to $399.4 million, up 17.2% from last year’s $340.7 million, with major contributions from the Army Logistics Modernization award, add-on business from existing awards and revenue from new business awarded in the past several months.