Thursday, 1 September 2011

The Timeline of Events on CSC Results

As there has been so much posted over the last two years about the ups and downs of CSC financial results we have prepared the following timeline which shows that either CSC Management have let events run away with them, or worse. We'll leave the reader to judge which it is.
1. May 2010 - FY09 Q4 announcements include tax credit that improves earnings by $36m. No growth in most businesses, some growth in US. 
Note this is the year that includes $90mln of 'mistated' earnings in Nordics and is also when the two expat leaders of Nordic business are removed from their posts.

2. November 2010 - Mike Mancuso CSC Finance President announces Nordics accounting problems total $40million, are now fixed.

3. 9th Feb 2011 - Associated Press "CSC shares tumble after company cuts forecast. In that forecast Mike Laphen CEO and Chairman says "... Due to sluggish pace of new business won".

4. 12th Feb 2011 - accounting irregularities of $80mln announced.

5. 2nd May 2011 - CSC gives profits warning and restates results.

6. 11th May 2011 - David Cameron, Prime Minister of UK says in Parliament "... There no plans to sign any new contract (for NHS IT) with CSC."

7. 16th June 2011- CSC reports Nordic accounting irregularities of $91mln. CSC had previously reported these irregularities were $40 mln, then  $80mln.

8. 10th August 2011 - Mike Laphen says " a very solid business with excellent prospects", and announces Q1 FY2012 EPS of $1.18 compared to Analyst consensus of 70 cents. Without that one-time tax credit the EPS would have been only about 43 cents per share, some 27cents below expectations.
9. 10th August 2011 - Form 10-Q states that recovery of CSC balance sheet position is "probable" on settlement of dispute with US Govt

10. 24 th August 2011 - CSC reports special charge of $250mln in FY2012  on settlement of dispute with US Govt

How many more changes in financial results are likely? Given the above there are probably more to come. Only time, and investors patience will tell.

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