Wednesday, 9 February 2011

CSC earnings in retreat and share price collapses

It should come as no surprise to any of our regular readers that CSC's results are getting worse. They have managed to get away with 'ensuring' earnings have held up over the last few years but after scrapping every barrel in sight and by not winning much new business which provides an opportunity to 'prepare' results in the best light, there is nowhere left to hide. As The Sage Of Omaha says "The tide has gone out and the naked swimmers can be seen."
Also the recent financial fiasco in Nordics, as well as managers leaving other subsidiaries rather than report the earnings that corporate wanted to see all adds up to a badly managed and badly led business.
We will remind readers that in very single country in Europe in the last few years every single finance chief has resigned, and also only one country chief is left. These do not point to a well managed company.

See latest international reports:-

CSC shares tumble after company cuts forecasts
Feb 9, 2011 3:58 PM GMT
By The Associated Press

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FALLS CHURCH, Va. (AP) — Shares of Computer Sciences Corp. tumbled more than 13 percent in morning trading Wednesday as the company cut its earnings-per-share and revenue forecasts for the full fiscal year.

The Falls Church, Va., information technology services provider reduced its full-year earnings-per-share forecast to $5.20 and its revenue forecast to $16.2 billion. Last quarter the CSC predicted full-year earnings of $5.35 to $5.45 per share on revenue of $16.5 billion to $17 billion.

The forecast fell below analysts' expectations, and CSC shares dropped $7.37 to $49.17. For the full year, analysts polled by FactSet had expected earnings of $5.37 per share on revenue of $16.54 billion.

Chairman and CEO Michael Laphen attributed the decrease to "the sluggish pace of new business awards" in its North American public sector, but said the company remains confident that its businesses will grow in line with longer-term projections.

The company also said Wednesday its fiscal third-quarter net income rose 14.7 percent on increased revenue from all of its business sectors.

For the three months ended Dec. 31, CSC said it made $242 million, or $1.54 per share, up from $211 million, or $1.36 per share, in the same period a year earlier.

Revenue was just over $4 billion for the quarter, up 1.4 percent from $3.95 billion in the year-ago quarter.

Analysts, on average, expected earnings for the quarter of $1.46 per share on revenue of $4.14 billion.

Copyright © 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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