But revenue for the quarter beat out estimates, anchored by the El Segundo, California-based company’s strong federal business, and it also upped its full-year earnings guidance.

Net loss for the quarter came in at $55.3m, or $0.29 per share, compared with net income of $131.6m, or $0.71 cents for the same period a year ago. But the loss includes the $215m charge from restructuring, as well as a gain of $18.3m from the redemption of its DynCorp International stock. CSC announced its restructuring this April in conjunction with the possibility of a sale of the company.

The company abandoned any plans for a sale in June, however, and instead announced $2bn in stock buybacks, roughly 19% of its outstanding shares. But the restructuring is going ahead as planned, including 5,000 job cuts, or about 6% of its total workforce, scheduled mostly for Europe, where demand has slouched.

For FY2007, CSC expects $345m in total pre-tax restructuring charges and $150m in related savings. The savings should double for FY2008, the company said.

Excluding these charges and stock options expense, which shaved $0.04, EPS for the quarter was in line with Wall Street’s forecasts of $0.61, according to Thomson Financial.

Revenue for the quarter slipped 1% to $3.56bn, but still beat analysts’ calls for $3.55bn. Federal revenue increased 6% to $1.29bn, while commercial business fell 4% to $2.26bn.

The commerical drag was particularly felt in Europe, where sales fell 9% to $941.9m, on weak demand in Germany and Italy, but also in the US, where business dipped 3% to $976.9. CSC posted increased revenue from Australia and Asia, as non-European international revenue ticked up 9% to $346.1m.

The company expects Q2 EPS from the high 60-cent to low 70-cent range, on revenue between $3.5bn and $3.6bn. For its full fiscal year, CSC upped its EPS range by 10 cents to between $3.61 and $3.71, on revenue from $14.9bn to $15.1bn.

This forecasts includes stock options expense and buyback gains, but excludes restructuring costs, the company said. The company has already repurchased $1bn worth of shares and plans to buy the other $1bn in the next six to 12 months.

Wall Street is predicting earnings of $0.79 per share on $3.66bn in revenue for Q2, and EPS of $3.66 on sales of $15bn for the full year.

CSC shares closed down 2% at $51.50 following the results announcement.

In other company news, the UK National Health System has announced that equipment failure at a CSC data center has severely interrupted the services the company provides to the country’s Northwest and West Midlands regions as part of the NHS’s Connecting for Health program. The failure, which stems from CSC’s storage area network equipment, began at 10am local time on Sunday July 30, 2006 and has affected about 80 NHS trusts in the areas.

The back-up systems also failed to kick in, the NHS said, but no data was lost.