Computer Sciences Corp. (CSC) grew its earnings and revenue in the first quarter, thanks largely to strong sales to the U.S. federal government, an area in which the services provider is traditionally strong.
CSC closed the quarter, ended July 4, with US$3.55 billion in revenue, up 29.1 percent from last year's first quarter, the company said Tuesday.
Net income came in at US$92.3 million, or US$0.49 per share, up from US$79 million, or US$0.46 per share, in the same period a year earlier. Earnings per share would have been US$0.51 without an after-tax special charge of US$3.9 million related to its DynCorp acquisition, CSC said.
The results exceeded the US$3.44 billion revenue consensus forecast from analysts polled by Thomson First Call. It met the analysts' earnings per share consensus forecast of US$0.51, which didn't take into account the one-time acquisition-related charge, a Thomson First Call spokesman said.
Revenue from the U.S. federal government grew 87.1 percent during the quarter, boosted by CSC's acquisition of DynCorp, which closed in March. CSC's U.S. federal government revenue exceeded US$1 billion for the first time ever, reaching US$1.48 billion, or 42 percent of the quarter's total revenue.
Global revenue from the commercial sector rose 5.7 percent (down about 2 percent in constant currency) to US$2.07 billion. U.S. commercial-sector revenue fell 3.4 percent, while European revenue rose 20.7 percent (about 2 percent in constant currency.) The company said its consulting and systems integration business stabilized in North America, but not in Europe and Asia.
CSC, in El Segundo, California, expects revenue for its second quarter, ended Oct. 3, to grow between 27 percent and 29 percent and earnings per share to come in between US$0.58 and US$0.60. The forecasts exclude special charges related to the DynCorp purchase.
The first-quarter DynCorp charge is related to the write-off of equipment that can't support the integration of the two companies. More acquisition-related charges are expected to surface in coming quarters and aren't expected to exceed US$16 million, CSC said.