Computer Sciences Corporation
) reported first-quarter 2014 earnings per share of 91 cents,
well ahead of the Zacks Consensus Estimate of 64 cents. The
company has successfully controlled its cost and expand its
The company reported first-quarter revenues of $3.26 billion,
down 10.3% from $3.63 billion year over year. Weak performances
across all business segments resulted in the decline in
revenues were $1.05 billion in the quarter or approximately 32.3%
of the total company revenue. The segment's revenues declined
11.0% on a year-over-year basis. The company is witnessing a
shift in customer demand which has led to a weakness in the NPS
Global Business services Sector
revenues stood at $1.08 billion, which is around 33.2% of the
total revenue generated by the company and is down 15.3% compared
to the year-ago quarter. The revenues from this segment took a
beating, after adjusting for the $79.0 million of revenues from
the divested IT staffing business. Moreover, the shift toward
high-value offering and leading edge solutions affected the
consulting business included in this segment.
North America Public Sector
revenues were $1.05 billion in the quarter, representing 32.3% of
the total company revenue. Segment revenues declined 11.0% on a
year-over-year basis. The company witnessed reductions in
professional services due to sequestration and continues to
witness delays in contract wins.
The company posted income from continuing operation of $304.0
million, up 108.2% from $146.0 million reported in the year-ago
quarter. This hike can be mainly attributed to a more than 100.0%
jump in operating income. The operating margin for the quarter
was 9.3% compared with 4.0% in the year-ago quarter. The
improvement was mainly due to the benefits received from better
contract performance and tight cost control.
Net income from continuing operation available to Computer
Sciences Corporation shareholders was $141.0 million or 91 cents,
compared to $17.0 million or 10 cents per share in the year-ago
Balance Sheet & Cash Back to Shareholders
The company exited the quarter with $1.93 billion in cash and
cash equivalents, down from $2.05 billion reported in the
previous quarter. Long-term debt balance was $2.46 billion,
slightly down from $2.50 billion. Moreover, the company generated
$213 million of cash from operating activity, up from $41.0
million in the previous quarter.
During the first quarter, Computer Sciences Corporation
returned $157.0 million to shareholders consisting of $30.0
million in common stock dividends and $127.0 million worth of
Computer Sciences Corporation is one of the leading players in
the information technology (IT) services industry. The company
reported mixed first-quarter 2013 results, with the bottom line
increasing year over year and ahead of the Zacks Consensus
Estimate but revenues declining on a year-over-year basis. The
company's consulting business took a beating. Moreover, the
company is returning cash to its shareholders in the form of
dividend and share repurchase.
However, the company is facing stiff competition from the
) and a challenging macroeconomic condition in Europe. Delay in
the government's order renewal process might add to the woes.
Computer Sciences holds a Zacks Rank #4 (Sell).
Investors can also consider the below-mentioned stocks -
) carrying a Zacks Rank #1 (Strong Buy)and
) carrying a Zacks Rank #2(Buy).
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