CSC Selected by Alstom - Analyst Blog


Banking on its innovative solutions, Computer Sciences Corporation ( CSC ) intends to expand further in the data center market.  The company recently announced that it has won a contract from electric transmission and power generation company Alstom (ALO).

As per the contract, CSC will provide its information technology (IT) infrastructure managed services solution to Alstom for a period of five years.

The company has taken on the responsibility of streamlining Alstom's global datacenter operations to increase innovation, improve the quality of service and reduce operational costs. Computer Sciences is expected to deploy its BizCloud and Storage as Service infrastructure solutions to provide Alstom with enhanced datacenter services.

Computer Sciences continues to explore its cloud-based services, as it uses BizCloud, which combines the privacy, security and control of a private cloud, and has the capacity to efficiently manage the workload of the company.

CSC has a large project pipeline and continues to augment it at regular intervals. The most recent one is a contract pertaining to information technology (IT) services solutions from the National Institute of Health Information Technology Acquisition and Assessment Center (NITAAC).

The company is also going through a restructuring process that should provide better visibility to its stakeholders. The company is in the process of restructuring its operating model to speed up the detection of troubled contracts and address the issues sooner.

The company is considering changes in management, restructuring management remuneration scheme, and evaluating some other contracts. The divestiture of non-core assets is another focus area. Moreover, the company is also working on putting together a new leadership team.

While restructuring, cost-saving and new contract wins are some of the ways in which the company is trying to increase its business volume, the delay in new order renewal from the government vertical and deterioration in European economic activity are some of the factors that concern us.

Intense competition in the IT and cloud computing space from both small and big players such as Accenture plc. ( ACN ) and Hewlett-Packard Company ( HPQ ) , CSC's large European exposure, strained federal budgets and delay in government approval are other factors weighing on the stock in the short term.

Currently, CSC holds a Zacks #5 Rank (implying a short-term Strong-Sell rating).

ACCENTURE PLC (ACN): Free Stock Analysis Report
COMP SCIENCE (CSC): Free Stock Analysis Report

HEWLETT PACKARD (HPQ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ACN , CSC , HPQ , IT

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