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Computer Sciences Corporation (CSC)

  • Tue, May 19, 4:46 PM
    • Confirming last week's Reuters report, Computer Sciences (NYSE:CSC) announces (in tandem with its FQ4 report) it plans to split its commercial IT services and U.S. public sector ops into separate, publicly-traded, companies. The former had FY15 revenue of $8.1B, and the latter revenue of $4.1B.
    • The split, like CSC's $10.50/share special dividend, is expected to occur by the end of October.
    • CSC is guiding for FY16 (ends March '15) EPS from continuing ops of $4.75-$5.05, favorable to a $4.80 consensus at a $4.90 midpoint.
    • FQ4 revenue fell 12.6% Y/Y in actual dollars, and 8% in constant currency. Global business solutions revenue -14.9% Y/Y to $980M; global infrastructure services -20.8% to $929M; North American public sector -0.4% to $1B.
    • $224M was spent to buy back 3.2M shares in FQ4. FY15 free cash flow totaled $717M, +4% Y/Y.
    • CSC has risen to $71.00 AH.
    • FQ4 results, PR
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  • Thu, May 14, 1:48 PM
    • Reuters reports Computer Sciences (NYSE:CSC) plans to split into two companies. Shares have spiked higher in response.
    • Back in February, dealReporter reported CSC is in talks to sell itself in a 2-part deal: P-E firms would buy its North American public sector ops, and a foreign company its commercial IT services ops. Activist Jana Partners has amassed a large stake.
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  • Mon, Feb. 23, 4:59 PM
    • Barry Rosenstein's Jana Partners has upped its Computer Sciences (NYSE:CSC) stake to 5.9% (8.37M shares) from a prior 2%. Jana adds it "has had and may continue to have discussions" with CSC's board about "potential strategic alternatives" and capital allocation. (13D filing)
    • Shares have risen to $73.55 AH. They rose 7.2% in regular trading after dealReporter stated CSC is in talks to do a 2-part sale.
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  • Mon, Feb. 23, 2:46 PM
    • Sources tell dealReporter Computer Sciences (CSC +6.5%) is in talks to sell itself in a 2-part deal: P-E firms would buy its North American public sector business, and a foreign "strategic buyer" would acquire its commercial IT services ops.
    • Shares have surged to new 52-week highs. Bloomberg reported in September CSC is exploring an LBO, and had contacted Blackstone, Bain, and other P-E firms.
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  • Mon, Feb. 23, 9:14 AM
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  • Mon, Feb. 9, 5:37 PM
  • Mon, Feb. 9, 4:44 PM
    • Computer Sciences' (NYSE:CSC) Global Business Services revenue fell 8.5% in constant currency to $965M. Sales were hurt by "the ongoing repositioning of the consulting business and contract completions, partially offset by growth in big data and applications modernization."
    • Global Infrastructure Services revenue fell 10.9% in constant currency to $984M. "Price-downs, restructurings, and contract completions" took a toll, while "growth in cloud and other next-generation offerings" partially offset.
    • North American Public Sector revenue was relatively healthy, rising 0.8% to $998M. CSC states "Growth from infrastructure services, business process outsourcing at civil agencies, and healthcare applications offset declines from Department of Defense contracts."
    • Cost controls drove the EPS beat: Op. margin rose 80 bps Y/Y to 11.3%. Free cash flow was $498M, +54% Y/Y and exceeding net income of $271M. Just $9M was spent on buybacks.
    • Shares are down to $62.00 AH. FQ3 results, PR.
  • Nov. 6, 2014, 5:51 PM
    • Computer Sciences (NYSE:CSC) has raised its FY15 EPS guidance range to $4.45-$4.65 from $4.35-$4.55. Consensus is at $4.51.
    • Shares -4.6% AH.
    • FQ2 results, PR
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  • Sep. 29, 2014, 3:58 PM
    • Bloomberg reports Computer Sciences (CSC +5.9%) has contacted Blackstone, Bain, and other P-E firms about an LBO. Shares have spiked higher.
    • Talks are said to be at an early stage, with CEO Mike Lawrie reportedly trying to convince would-be suitors CSC's turnaround is half-finished. One source says P-E firms like the IT services firm's multiples, but have concerns about its cash flow and slower-growing units.
    • With a current market cap of $8.7B, CSC would be a big fish to swallow. But the company's low valuation (shares go for 0.7x FY14 sales) and fairly predictable revenue streams could boost P-E interest.
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  • Aug. 7, 2014, 7:12 PM
    • Following its FQ1 beat, CSC is still targeting FY15 (ends March' 15) EPS from continuing ops of $4.35-$4.55; consensus is at $4.49.
    • Global business services revenue -3% Y/Y in FQ1 to $1.09B, with $1.2B in contract awards Global infrastructure services +1% to $1.13B, with $1.2B in contract awards. North American public sector -3% to $1.02B, with only $300M in contract awards.
    • Op. margin fell to 7.7% from 8.3% a year ago. Free cash flow was $70M, below net income of $146M. $148M was spent on buybacks.
    • CSC has also announced it's expanding an existing partnership with IBM, with a focus on providing new cloud, mobile, and big data/analytics offerings. Among other things, CSC will create a "center of excellence" for IBM offerings, and integrate its ServiceMesh Agility cloud management platform with Big Blue's SoftLayer cloud infrastructure (IaaS) platform.
    • FQ1 results, PR
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  • May 8, 2014, 5:33 PM
    • Along with its FQ4 results, Computer Sciences (CSC) announces it's hiking its quarterly dividend by 15% to $0.23/share (1.6% forward yield), and authorizing a new $1.5B buyback (good for repurchasing 18% of shares at current levels).
    • CSC expects EPS from continuing ops of $4.35-$4.45 in FY15 (ends March '15), in-line with a $4.43 consensus.
    • Global business services revenue -4% Y/Y in FQ4 to $1.18B, global infrastructure services flat at $1.19B, North American public sector -11% to $1.00B. Contract awards rose to $4.3B from $3B a year ago.
    • FQ4 free cash flow was $288M, above income from continuing ops of $179M. Op. margin rose to 10.8% from 9.8% in FQ3 and 5.9% a year ago. $151M was spent on buybacks.
    • Shares are nearly unchanged AH for now. FQ4 results, PR
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  • Apr. 10, 2014, 10:16 AM
    • Morgan Stanley has hiked its FY15/16 H-P (HPQ +2.8%) EPS estimates above consensus on expectations of a margin recovery for the company's slumping enterprise services unit.
    • The firm thinks enterprise services will post at least an 8% FY16 (ends Oct. '16) op. margin, up from just 1% in FQ1. It points out rival Computer Sciences (CSC -0.5%), which has carried out similar restructuring moves and has a slightly less favorable revenue mix, is set to have a 9% 2014 op. margin.
    • Deutsche, meanwhile, has assigned H-P a Buy rating and $40 PT as part of a broader IT hardware coverage launch. The firm likes H-P's IT hardware lineup, and sees "ample room" for margin expansion as "the company gets closer to industry levels in segments like software, services, storage and networking."
    • Deutsche thinks software op. margin could rise to 30% from a current 22%, and forecasts company-wide op. margin will rise to 9.4% in FY15 from 8.5% in FY13.
    | 1 Comment
  • Jan. 30, 2014, 7:04 PM
    • Broadcom (BRCM) expects Q1 revenue of $1.9B-$2B vs. a $1.97B consensus. Gross margin is expected to drop 50-100 bps Q/Q. Shares +2.2% AH; expectations were depressed following Apple and Samsung's earnings/guidance. (Q4 results, PR)
    • NetSuite (N) expects Q1 revenue of $119M-$121M and EPS of $0.01-$0.02 vs. a consensus of $119.7M and $0.06. The company expects 2014 revenue of $535M-$540M and EPS of $0.24-$0.26 vs. a consensus of $532.9M and $0.28. Shares +2.5% AH. (Q4 results, PR)
    • Computer Sciences (CSC) now expects FY14 (ends in March) EPS from continuing ops of $3.80-$3.90, above prior guidance of $3.50-$3.70 and a $3.68 consensus. Shares +1.5% AH. (FQ3 results, PR)
    • Microchip (MCHP) expects FQ4 revenue of $482.4M-$496.8M and EPS of $0.59-$0.63 vs. a consensus of $488.4M and $0.62. Shares -4.1% AH. (FQ3 results, PR)
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  • Jan. 23, 2014, 2:44 PM
    • New Deutsche software analyst Karl Keirstead has started coverage on Veeva (VEEV +1.6%) with a Buy and $42 PT.
    • He's upbeat about the potential of Veeva's Vault cloud-based document management system to replace on-premises solutions at pharma/life sciences companies - especially Computer Sciences' (CSC -2.4%) FirstDoc, which Keirstead believes might have an ~80% share at top-50 pharma companies.
    • Shares dove last week after SA contributor Suhail Capital reported Genentech/Roche had abandoned Veeva's cloud CRM platform in favor of a custom solution built on Salesforce's platform. Veeva confirmed the loss, but insisted the circumstances surrounding Genentech's move were unique.
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  • Oct. 31, 2013, 1:27 PM
    • With shares having doubled from their Sep. '12 lows, Computer Sciences (CSC -5.8%) is selling off after posting mixed FQ2 results and reiterating guidance for FY14 EPS from continuing ops of $3.50-$3.70 (consensus is at $3.67).
    • CSC has also announced it's buying ServiceMesh, a provider of enterprise cloud management services, for $158M. CSC notes ServiceMesh's platform allows companies to manage apps across multiple clouds (useful as companies adopt a mixture of public, private, and hybrid clouds), and to set governance, access, and performance policies for them.
    • On its CC (transcript), CSC mentioned its commercial book-to-bill was 1.0, up from 0.9 in FQ1 and a normalized 0.6 a year ago. In addition, global business services B2B rose to 1.2 from 1.1 in FQ1 and 0.8 a year ago. But global infrastructure bookings remain soft: B2B was 0.7, flat Q/Q and up from a very depressed 0.3 a year ago.
    • Business services revenue fell 12.8% Y/Y to $1.05B, infrastructure services 3.6% to $1.12B, and North American public sector 11.6% to $1.05B. Two bright spots: cybersecurity revenue rose 27% exc. forex, and cloud revenue rose 29%.
    • FQ2 free cash flow was $86M, below net income of $209M and down from $105M in the year-ago period.
    | Comment!
  • Sep. 11, 2013, 9:36 AM
    • RF Micro (RFMD +0.4%) has been received a two-notch upgrade of sorts from Raymond James, getting lifted to Strong Buy from Market Perform. Rival Skyworks (SWKS -0.9%) has been upgraded to Strong Buy from Outperform.
    • Nokia (NOK +3%) has been upgraded to Outperform by RBC, and has received a two-notch upgrade to Buy by Berenberg. The company has already received a slew of upgrades since the Microsoft deal was announced.
    • Himax (HIMX +4%) has been started at Outperform by Northland.
    • QLogic (QLGC +1.2%) has been started at Overweight by Barclays. Rival Emulex has been started at Equal Weight.
    • Take-Two (TTWO -2.8%) has been downgraded to Sector Perform by Pac Crest.
    • iGate (IGTE +6.5%) has been upgraded to Buy by Janney.
    • Computer Sciences (CSC +1.3%) has been started at Positive by Susquehanna.
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Company Description
Computer Sciences Corp provides information technology (IT) and professional services and solutions. The Company's reportable segments are Global Business Services (GBS), Global Infrastructure Services (GIS), and North American Public Sector (NPS).