Computer Sciences CorporationNYSE
Computer Sciences Goes Ex- Buy Before The Spin
Alpha Gen Capital
Alpha Gen Capital
Computer Sciences Corp.: Positioned Better For A Sale
Alpha Gen Capital
Alpha Gen Capital
Thu, Nov. 3, 4:38 PM
Wed, Nov. 2, 5:35 PM
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Wed, May 25, 3:00 PM
Wed, May 25, 12:50 PM
Wed, May 25, 9:49 AM
- HP Enterprise (HPE +11.3%) and Computer Sciences (CSC +34.2%) are leading tech gainers today after each posted earnings beats and said they were merging CSC with HPE's spun-off enterprise services unit.
- That deal's likely good for HPE shareholders, Brean Capital says, and the combo of legacy enterprise sales/service with CSC's innovation pipeline should be able to gain share in IT services.
- Analyst Ananda Baruah maintained a Hold on HPE: “For the equity, after watching a chunk of our coverage struggle to execute traditional services businesses and get valued on the remainder of the businesses, we believe that HPE will be both more focused internally and viewed differently (more favorably) by investors for having done this deal."
- Mizuho (Neutral) has boosted its price target on HPE to $16 from $13, and FBN Securities (Outperform) has raised its target to $21 -- the latter target implying about 16% upside from today's higher price. Needham has upgraded from Hold to Buy.
- Meanwhile, Global Equities' Trip Chowdhry isn't high on the deal and the job cuts required (expecting 65,000 layoffs at the combined company): "Two bad assets does not make one good asset." Chowdhry believes the market in which the companies play is going to shrink by 40-60%.
Wed, May 25, 9:20 AM
Tue, May 24, 5:35 PM
Tue, May 24, 5:13 PM
- Computer Sciences (NYSE:CSC): FQ4 EPS of $0.73 beats by $0.05.
- Revenue of $1.8B (-5.8% Y/Y) in-line.
Tue, May 24, 4:43 PM
- HP Enterprise (NYSE:HPE) and Computer Sciences (NYSE:CSC) expect the spinoff of HPE's Enterprise Services unit and its related merger with CSC to be finished by March 31, 2017. CSC chairman/CEO Mike Lawrie will be chairman/CEO of the new company, and HPE chief Meg Whitman a board member. In line with the company's ownership, there will be a 50/50 split between directors nominated by HPE and CSC.
- HPE estimates the transaction will be worth $8.5B to its shareholders, with $4.5B delivered from its equity stake in the new company, $1.5B from a cash dividend, and $2.5B from the assumption of debt and other liabilities. With Enterprise Services and CSC competing in many of the same IT services markets, the companies expect a $1.5B/year cost synergy run rate a year after the merger closes. Many of those markets have been hurt by cloud services adoption.
- Along with the spinoff/merger, HPE announces it has added $3B to its buyback authorization, raising its total funds to $4.8B. Almost no buybacks occurred in FQ2.
Top-line performance: HPE's revenue growth (+1% Y/Y, +5% excluding forex) was positive on a dollar basis for the first time in five years. Enterprise Group (IT hardware and related services) revenue rose 7% Y/Y in FQ2 (better than expected). Enterprise Services fell 2% to $4.7B (a smaller decline than in recent quarters). Software fell 13% to $774M. Financial Services fell 2% to $788M.
Within Enterprise Group, server revenue rose 7% (share gains), storage rose 2%, networking (boosted by the Aruba Networks acquisition) rose 57%, and tech services fell 6%. Within software, license revenue (closely watched) fell 12%, SaaS revenue fell 11%, and professional services fell 3%.
- Financials: A mix shift towards hardware from software led non-GAAP op. margin to drop to 7.9% from 8.4% a year ago. Free cash flow totaled more than $500M. HPE ended FQ2 with $9B in cash and $16.2B in debt.
- HPE +8.9% after hours to $17.70. CSC +18.7% to $42.31. A conference call discussing both HPE's earnings and the CSC transaction is underway.
- HPE's results/guidance, earnings release
Tue, May 24, 4:11 PM
- Hewlett Packard Enterprise (NYSE:HPE): FQ2 EPS of $0.42 in-line.
- Revenue of $12.71B beats by $380M.
- Company spinning off enterprise services unit, merging it with Computer Sciences (NYSE:CSC). HPE shareholders will own 50% of the new company.
- Expects FQ3 EPS of $0.42-$0.46, below a $0.48 consensus.
- Reiterates FY16 (ends in October) EPS guidance of $1.85-$1.95. Consensus is at $1.89.
- HPE +8.3% after hours.
- Update (4:14PM ET): Computer Sciences is up 6.6% after hours.
Mon, May 23, 5:35 PM
Mon, May 23, 11:22 AM
- CSC has agreed to acquire cloud-tech firm Aspediens and add it to its ServiceNow practice.
- CSC will add Aspediens (an existing ServiceNow partner) to its Fruition Partners business, a platform that also includes UXC Keystone.
- The move makes CSC the world's No. 1 ServiceNow integrator, it says.
- Aspediens was founded in 2008. The deal is expected to close June 30.
Tue, May 17, 5:02 PM
- Computer Sciences (NYSE:CSC) declares $0.14/share quarterly dividend, in line with previous.
- Forward yield 1.65%
- Payable July 11; for shareholders of record June 14; ex-div June 10.