Computer Sciences Corp. (CSC) on Wednesday reported nearly 15% increase in third-quarter profit even as the company continues to face award decision delays by the federal government. Earnings topped Wall Street view. Further, the company lowered its fiscal 2011 forecast. The stock is down over 6% in pre-market activity.
Net income attributable to CSC common shareholders rose to $242 million or $1.54 per share from $211 million or $1.36 per share in the prior year and was higher than $184 million or $1.18 per share reported in the preceding second quarter. On average, 13 analysts polled by Thomson Reuters expected earnings per share of $1.48 for the third quarter. Analysts' estimates typically exclude one-time items.
Computer Sciences offers information technology and business process outsourcing, as well as IT and professional services to the commercial and government markets.
Revenues for the quarter grew to $4.01 billion from $3.95 billion in the prior year and $3.98 billion in the prior quarter. Analysts estimated revenues of $4.16 billion for the quarter.
Revenues improved year-over-year in North American Public Sector, or NPS, Business Solutions & Services and Managed Services Sector. Within the NPS segment, revenue from Civil agencies dropped nearly 15% from last year to $301 million.
New business awards for the quarter totaled $2.3 billion. The company noted that its Public Sector revenue continues to be impacted by award decision delays by the federal government while the Commercial segments continue to grow.
The company incurred a gain of $12 thousand in tax, compared to expense of $75 thousand last year.
For fiscal 2011, the company now expects earnings per share of about $5.20 on revenues of around $16.2 billion. The previous forecast was for full-year earnings per share of $5.35 - $5.45 and revenue of $16.5 billion - $17.0 billion. Wall Street looks for fiscal 2011 earnings of $5.39 per share on revenues of $16.56 billion.
CSC Chairman and Chief Executive Officer Michael Laphen said, "Although the sluggish pace of new business awards in NPS is impacting the rate of our revenue growth, we remain confident our businesses will grow in line with our longer term projections."
CSC closed Tuesday's regular trade at $56.54, up from the prior close of $56.21, on 1.45 million shares. The stock is down 6.44% in pre-market activity and is at $53.
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