Information technology consulting firm Computer Sciences Corporation (NYSE: CSC) fell US$1.70to $35.90 in morning trading Tuesday, after reporting quarterly results thatwere in line with previously lowered estimates.
“While our revenuegrowth for the fourth quarter was quite solid, our profits were not,” CSC chairman, president and chief executive officer Van B. Honeycutt said.
Honeycutt said results were hurt by a “continuing deterioration” of demandfor commercial consulting and systems integration services, particularly inNorth America, lower sales of software licenses and related services, revisions to some projects, and expenses associated with “formerInternet-related clients.”
Revenue for the fourth quarter ended March 30th rose 12.5 percent from ayear earlier, to $2.9 billion. The El Segundo, California-based company said the “strong year-over-year comparison” was “notable, given the difficult economic environment.”
Income before special items totaled $61.3 million, or 36 cents per share,while the net loss totaled $37.4 million, or 22 cents.
On the positive side, CSC said the acquisition of Mynd”further strengthened” financial services offerings, and U.S. federalgovernment and commercial outsourcing activities “continued to show goodrevenue growth.” The company said it won $10.9 billion in new businessduring the past year.
CSC said it expects some of the fourth quarter’s problems tocontinue into the current fiscal year.
“We anticipate our results toimprove, quarter by quarter, as fiscal 2002 progresses,” Honeycutt said.
Thecompany said earnings per share for the year will likely total $2.25 to$2.35; analysts had expected a range of $1.87 to $2.51. Revenue growth willlikely be 11 to 13 percent, the company said.
CSC predicted earnings per share for the first quarter ending June 29th “inthe high 20-cent range.”
Latest quarter results including $148.7 million in special charges, with$137.5 million relating to a restructuring announced in March and $11.2million covering a restructuring of the financial services division toinclude the Mynd operations.
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