Computer Sciences Corporation
reported fourth quarter 2012 loss per share of $1.02, way below the
Zacks Consensus EPS Estimate of 20 cents.
The company reported revenues of $4.11 billion in the quarter,
down 2.1% year over year. The year-over-year decline in
revenue was primarily attributed to the company's NPS segment. The
company's commercial business, principally BSS, grew at the rate of
1.3% in constant currency, while it was roughly flat on a GAAP
During the quarter, the company registered NPS revenue of $1.40
billion, declining 6.6% from the fourth quarter last year),MSS
revenue was $1.71 billion, declining 2.3% from the year ago quarter
and BSS revenue was $1.03 billion, improving 5.1% from the year ago
The company secured total new business awards of $6.3 billion
across its three lines of businesses.
North American Public
Sector (NPS) contributed $1.2 billion,
Managed Services Sector
(MSS) delivered $4.0 billion, and
Business Solutions & Services
(BSS) closed $1.1 billion worth new business.
For the fiscal year 2012, new business awards for the company
was $19.3 billion, which increased by 30.0% compared to the
previous year. This is constituted of MSS of $9.5, whereas NPS $6.0
billion, and BSS of $3.8 billion.
The company posted loss from continuing operation of $71.0
million, compared to a profit of $338.0 million reported in the
year ago quarter. The operating loss margin for the quarter was
(2.04%), deteriorating considerably from the operating profit
margin of 8.04% in the year-ago quarter. The margin was negatively
impacted by higher cost of services and a significant goodwill
impairment charge during the quarter.
Computer Sciences reported net loss, attributable to the
company's shareholders, of $158.0 million compared with a profit of
$171.0 million in the year-ago quarter. Reported loss per share of
$1.02 was much wider than the EPS of $1.01 in the year-ago
The company exited the quarter with $1,093.0 million in cash and
cash equivalents, up from $898.0 million reported in the previous
quarter. CSC had a total debt balance of $2.74 billion, up from
$2.73 billion in the previous quarter.
The Company is still evaluating the impact of the turnaround
initiatives and is expected to issue annual guidance later for
fiscal year 2013, most probably during the next earnings call.
Computer Sciences is one of the leading players in the
information technology (IT) services industry. CSC reported
mediocre fourth quarter 2012 result, with the bottomline missing
the Zacks consensus estimate and the company registering a loss per
share. The company displayed a mediocre operating performance,
whereas the new business awards improved meaningfully.
Intense competition in the IT and cloud computing space from
both small and big players such as
Accenture plc (
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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