CSC's Q3 revenue slips, but profit is up sharply

CSC's Q3 revenue slips, but profit is up sharply

IT services provider Computer Sciences (CSC) reported significantly higher profits for its 2003 third fiscal quarter, but its revenue dropped.

CSC had net income of $US105.7 million, up from 2002's third fiscal quarter when it reported a net income of $US87.1 million. However, revenue slid 3.5 per cent to $US2.79 billion in the quarter ending December 27, 2002.

Profits grew thanks to CSC's sales of consulting and systems integration services in North America, sales in general to the US federal government and ongoing cost-reduction efforts, the company said. Conversely, demand for the company's services continued to be soft outside of North America.

Looking ahead, CSC expected its 2003 revenue to drop between 2 per cent and 4 per cent compared with that for the quarter just ended. That estimate excluded any contributions to revenue from DynCorp, a company CSC is in the process of acquiring.

Moreover, CSC expects its 2004 fiscal year revenue to rise about 25 per cent to about $US14.5 billion, an estimate that includes the expected additional revenue from DynCorp. In the 12 months ending September 26, 2002, DynCorp had a revenue of $2.3 billion and 23,000 employees.

CSC announced the DynCorp acquisition in mid-December and valued it at about $US950 million. The acquisition was aimed at beefing up CSC's business with the US federal government and was expected to close during the first calendar quarter of 2003.

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