The El Segundo, California-based services company reported revenues of $2.8bn for the third quarter ending December 27, down 3.5% on the year. Net income was up 21.4% to $105.7m. Earnings per share were $0.61. For the year to date, sales were down 0.9% to $8.3bn, with net income coming in at $277.5m, a rise of $36.7%.
The company said its US federal government business partially offset the continued softness in worldwide demand for commercial IT services in the financial services market and for short-term project services. Margin improvement was driven by its North American consulting and systems integration business, and its federal business. The company also focused on efficiencies in its business.
Chairman and CEO Van Honeycutt said the company had a 26 month pipeline of federal business of around $24bn, evenly split between defense and civil work.
In the fourth quarter, US federal government business was worth $789.6m, compared to $736.8m the previous year. Defense spending accounted for $464.6m of this. US commercial spending was $969.1m, down from $1bn the previous year. European commercial spending was $760.1m, down from $761.3m the previous year.
For the current quarter, CSC expects earnings per share in the mid $0.90 range, with revenues slipping 2% to 4%, before the impact of its acquisition of DynCorp. For 2004, the company expects revenue growth of 25%, including the impact of DynCorp. Excluding DynCorp, CSS expects revenue growth in the high single digits.
CSC expected organic earnings growth, and reminded analysts it had previously said DynCorp would be accretive to growth.
Source: Computerwire
