This time it's a transportation contract for the computing major
Computer Sciences Corporation
). The company recently announced that it has been awarded one of
six prime contractors in the Traffic Management Infrastructure
Systems program contract by the U.S. Government's Transportation's
It is an indefinite delivery, indefinite quantity (IDIQ)
contract, which has been awarded to the company during its fiscal
2012 third quarter, and has a performance period of five years with
a consolidated contract value not exceeding $450 million.
As per the agreement, CSC will compete for task orders to
develop research and test the Federal Aviation Administration's
NextGen applications and concepts for programs such as the
Continuous Lower Energy, Emissions and Noise and the Commercial
Aviation Alternative Fuels Initiative.
The company is consistently winning private and government
orders, and has secured a contract from NHS, the National Health
Service (NHS) department of the U.K., which may be expected to
extend its relations with the government department.
The company is not only nurturing and enhancing its relationship
with NHS, but also exploring other areas. For instance, the company
has a relationship with NAVAIR UAS to enhance its business
prospects with the U.S. Navy. The company has won yet another
contract from them, which has been valued at $874 million, which
will be spread over a period of 60 months.
CSC has won a series of deals over the past six months. The
company reported modest third quarter 2012 results, with EPS
exceeding our expectation. Although revenues declined on a year
over year basis, the flow of new business improved substantially
from the year-ago period.
Intense competition in the IT and cloud computing space from
both small and big players such as
), its European exposure and strained federal budgets have
prompted our bearish outlook on the stock.
Currently, CSC holds a Zacks #5 Rank (implying a short-term
Strong Sell rating).
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