Computer Sciences Corporation
) reported fourth-quarter 2013 earnings per share of $1.27, way
ahead of the Zacks Consensus Estimate of 96 cents. The company
has been able to control its cost and expand its margins.
The company reported fourth-quarter revenues of $3.70 billion,
down 7.3% from $3.99 billion year over year. Weak performances of
the North American Public (NPS) segment, Managed Services Sector
(MSS) and Business Solutions & Services (BSS) resulted in the
decline in revenues.
revenues were $1.31 billion in the quarter or approximately 35.4%
of the total company revenue. The segment's revenues declined
6.8% on a year over year basis. The revenues from the Department
of Defense, accounted for 68.0% of the total business, and
resulted in a contribution of $884.0 million, which declined 8.0%
compared to the year-ago period. Moreover, the NPS segment's
revenues include a $365 million contribution from the civil
Managed Services Sector's
revenues stood at $1.63 billion, which is around 44.1% of the
total revenue generated by the company and is down 4.0% compared
to the year ago quarter. However, bookings declined in this
Business Solutions & Services'
revenues were $796.0 million in the quarter, representing 21.5%
of the total company revenue. Segment revenues declined 12.3% on
a year-over-year basis.
The company posted operating profit of $212.0 million,
rebounding from an operating loss of $98.0 million reported in
the year-ago quarter. The operating profit margin for the quarter
was 5.7% compared with a loss margin of 2.5% in the year-ago
quarter. The improvement was mainly due to margin expansion
across all the business segments backed by proper cost reduction
Management's cost savings plans, include areas such as supply
chain, workforce optimization, overhead and the contract
management focus account.
Net income from continuing operations was $281.0 million or
$1.81, compared to a loss of $158.0 million or $1.02 per share in
the year ago period. Adjusted net income for the company stood at
$197.0 million or $1.27 per share, compared with a loss of $158
million or $1.20 per share in the year-ago quarter.
Balance Sheet & Cash Back To Shareholders
The company exited the quarter with $2.05 billion in cash and
cash equivalents, down from $2.20 billion reported in the
previous quarter. Long-term debt balance was at $2.5 billion, up
from $2.40 billion. Moreover, the company generated $41.0 million
of cash from operating activity.
CSC returned $258.0 million to shareholders. While $30 million
were in the form of common stock dividends, the remaining $228
million were used for repurchasing 4.7 million shares at an
average price of $48.15.
During the fiscal year 2013, CSC returned $428.0 million to
shareholders in the form of common stock dividends worth $123.0
million and share repurchases worth $305.0 million. CSC
repurchased 6.7 million shares at an average price of $45.47.
Computer Sciences Corporation is one of the leading players in
the information technology (IT) services industry. The company
reported modest fourth-quarter 2013 results, with the bottom line
ahead of the Zacks Consensus Estimate but revenues declining on a
year-over-year basis. Moreover, the company is giving back cash
to its shareholders in the form of dividend and share
However, the company is feeling the heat of competition from
the likes of
), coupled with a challenging macroeconomic condition in Europe.
In addition to this, delayed order renewal process of the Federal
government can make things difficult for the company.
Computer Sciences has a Zacks Rank #3 (Hold).
Investors can also consider the below mentioned stocks -
CSGb System Intl Inc.
) both carrying a Zacks Rank #1 (Strong Buy).
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