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CSC earnings, revenue up in Q1

CSC earnings, revenue up in Q1

Computer Sciences (CSC) grew its earnings and revenue in the first quarter, thanks largely to strong sales to the US federal government, an area in which the services provider is traditionally strong.

CSC closed the quarter, ended July 4, with $US3.55 billion in revenue, up 29.1 per cent from last year's first quarter, the company said.

Net income came in at $US92.3 million up from $US79 million in the same period a year earlier, CSC said. Earnings per share were affected by an after-tax special charge of $US3.9 million related to its DynCorp acquisition.

Revenue from the US federal government grew 87.1 per cent during the quarter, boosted by CSC's acquisition of DynCorp, which closed in March. CSC's US federal government revenue exceeded $US1 billion for the first time ever, reaching $US1.48 billion, or 42 per cent of the quarter's total revenue.

Global revenue from the commercial sector rose 5.7 per cent (down about 2 per cent in constant currency) to $US2.07 billion. U.S. commercial-sector revenue fell 3.4 per cent, while European revenue rose 20.7 per cent (about 2 per cent in constant currency.)

The company said its consulting and systems integration business stabilised in North America, but not in Europe and Asia.

CSC expects revenue for its second quarter, ended October 3, to grow between 27 per cent and 29 per cent.

The forecasts exclude special charges related to the DynCorp purchase.

The first-quarter DynCorp charge is related to the write-off of equipment that can't support the integration of the two companies.

More acquisition-related charges were expected to surface in coming quarters and weren't expected to exceed $US16 million, CSC said.


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