Tech behemoth
Computer Sciences Corporation
(
CSC
) has recently entered into a discussion with the National Health
Service (
NHS
) department of the U.K., which may be expected to extend its
relations with the government department. The interested parties
have issued a non-binding letter of intent, which is expected to
become binding by March 31, 2012.
The relationship between the two may be expected to improve as a
result, although it will take some more time to come to an
agreement.
Apart from NHS, the company is also enhancing its business
prospects with NAVAIR UAS to enhance its business prospects with
the U.S. Navy.
This job has been awarded to three main vendors under its
indefinite delivery/indefinite quantity (IDIQ) agreement with them.
The contract has been valued at $874 million, to be received over a
60 month period.
As per this agreement, CSC is eligible to receive task orders to
fly land-based UAS aircraft to deliver streaming video from
electro-optic and infrared cameras directly to military users in a
remote theater of operations. The company is expected to deploy
trained people, equipment and supplies to execute this job.
These facilities combined together results in cost savings for
the customers, who are expected to receive Intelligence,
Surveillance, and Reconnaissance (
ISR
) coverage without any additional investment in labor and
equipment. The customer pays only for video hours delivered as a
service.
CSC has never found much difficulty in attracting deals. Apart
from Government orders, the company has also won some big-ticket
private orders in the recent past. Overall, CSC's pipeline of
projects looks good right now and the company continues to augment
it at regular intervals.
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.
Despite the 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
), the European exposure and strained federal budgets; we believe
that things are beginning to look up given the new business
wins.
Currently, CSC holds a Zacks #3 Rank (implying a short-term Hold
rating).
ACCENTURE PLC (
ACN
): Free Stock Analysis Report
COMP SCIENCE (
CSC
): Free Stock Analysis Report
HEWLETT PACKARD (
HPQ
): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment
Research