- Though the company beat FQ3 EPS estimates (while missing on revenue) in its first post-breakup earnings report, Computer Sciences (CSC) guided on its earnings call (transcript) for FY16 (ends March '16) EPS of $2.40-$2.60 vs. a $2.60 consensus. The outlook is blamed on "higher currency headwinds and the potential impact of lower discretionary [IT] spending on our business."
- The IT services firm also guided for FQ4 revenue to be down by a low-single digit % Y/Y in constant currency. Forex is expected to have a 400 bps revenue impact.
-
Top-line performance: Global Business Services (GBS) revenue fell 8% Y/Y in FQ3 to $886M, with lower Consulting & Applications revenue (possibly hurt by cloud services adoption) offsetting "modest growth" for CSC's Industry Software & Solutions and Big Data businesses. Global Infrastructure Services (GIS) revenue fell 12% to $864M; CSC blames legacy business declines.
-
Bookings: On the bright side, bookings rose 21% Y/Y to $2.7B, yielding a 1.5 book-to-bill. GBS bookings rose 35% to $1.6B, and GIS bookings 4% to $1B. Healthcare and insurance bookings respectively rose over 40% and over 30%.
-
Financials: Job cuts helped op. margin to rise 200 bps Y/Y to 10.9%. Only $10M was spent on buybacks. CSC ended FQ3 with $1.8B in cash and $2.7B in debt.
-
CSC's FQ3 results, earnings release