Thursday, 18 April 2013

A Look at CSC Results over 11 years

This table contains figures taken directly from CSC's own financial reports. The only derived figures are those for 2013 where we have used the 3 quarters year to date factored to a full year, and the calculations per employee.





Employees
Revenue
Revenue Per Employee

OI
Assets
OI Per Empee
Margin
2013 Factored on 3 Qtrs
93000
$11,592,000,000
$165,778

$404,000,000
$11,189,000,000
$4,344
3.49%
2012
98000
$15,900,000,000
$162,245

-$4,242,000,000
$11,189,000,000
-$43,286
-26.68%
2011
91000
$16,000,000,000
$175,824

$725,000,000
$16,120,000,000
$7,967
4.53%
2010
94000
$16,100,000,000
$171,277

$830,000,000
$16,455,000,000
$8,830
5.16%
2009
92000
$16,740,000,000
$181,957

$1,115,000,000
$15,619,000,000
$12,120
6.66%
2008
89000
$16,500,000,000
$185,393

$545,000,000
$15,775,000,000
$6,124
3.30%
2007
79000
$14,855,000,000
$188,038

$389,000,000
$13,731,000,000
$4,924
2.62%
2006
79000
$14,650,000,000
$185,443

$577,000,000
$12,943,000,000
$7,304
3.94%
2005
79000
$14,059,000,000
$177,962

$496,000,000
$12,610,000,000
$6,278
3.53%
2004
80000
$13,448,000,000
$168,100

$476,000,000
$11,804,000,000
$5,950
3.54%
2003
81000
$11,162,000,000
$137,802

$429,000,000
$10,433,000,000
$5,296
3.84%









11 year average
86818
$14,636,909,091
$172,711

$158,545,455
$13,442,545,455
$1,826
1.08%


Looking at the results over the 11 years listed shows some very odd years and raises many questions which we leave to our readers and commentators to ask. But they do in part show why there are some very unhappy investors investors out there.


10 comments:

Anonymous said...

The 2012 results showed that previous years profits had been one big lie.

Knowing that gives us the benefit of hindsight, which is always wonderful. But nevertheless, there are signs in previous years' results which should have raised questions for CSC managament or failing that, the Analyst community.

Examples:

In 2008, headcount went up by 10,000 or 17%, but revenue per head only declined by 1.5%. This looks odd; you would expect a greater decline in revenue per head due to the time and investment needed to ingregrate so many new hires and get them fully productive.
Similarly OI per head went up 25% in 2008. With hindsight, this seems too good to be true, as CSC had nothing new or great to offer to the market. At the same time there was big increase in asset levels, which should have been questioned. It would be interesting to have seen the movement in "Unbilled Receivables" in that year. Maybe CSC was being optimistic about the value of Work-in-Progress.

2009 looks even more odd. Operating margin was abnormally high. OI per head almost doubled, despite a slight drop in Revenue per head. This means that cost per head dropped from $180,000 (which it had been for the 3 previous years) to $170,000. Why? Looking back at the Press Releases, it is not clear that anybody at CSC noticed it or questioned it. Hindsight suggests that it may have to do with the Earned Value and WIP valuations on the UK NHS program.

2010 was more "reasonable", but nevertheless very high margin and OI per head compared to historical trends. 2011 followed this trend of downwards pressure, but nevertheless margins above the historical averages .

Then in 2012 all the chickens came home to roost, Laphen got a massive payoff, shareholders got hammered and employees suffered the consequences of management failure.

Anonymous said...

Interesting.
This indicates that the last five years when added together show that CSC has made no OI at all due to the booking of the major loss in 2012.
That is an awful performance by any standards. Yet you say in previous posts that those responsible have exited after receiving multimillion dollar pay outs through salary, bonus or golden goodbyes and that the workers being made redundant get the minimum.
How can these ex-leaders look themselves in the mirror in the morning or at their wives and children and friends, assuming they still have any of the latter.

Anonymous said...

Your analysis shows that under the last 5 Mike Laphen Years CSC made a cumulative loss of $8.2bln whereas under his Predecessor's last 5 Years CSC made a cumulative profit of $40bln.
As also mentioned the ground troops are being fired with minimal pay off while Laphen's rewards are well documented in your blog.
Here's what one newspaper in 2009 had to say about his life style then......

Mr Visa’s £5 million lifestyle

The man who heads the American company responsible for issuing thousands of British visas is Michael W. Laphen, a former National Security Adviser to President George W. Bush.
Mr Laphen is paid more than $1million (£671,000) a year as chief executive and chairman of CSC, the owner of WorldBridge. His total annual ‘compensation’ package is worth more than £5million.

Riches: Michael Laphen
He lives in a six-bedroom, four-bathroom, colonial-style mansion set in two acres of lawns in Great Falls, near the firm’s base in Virginia.
The £2million house boasts three garages, a library, a two-storey family room, a basement ‘rec’ room, a bar, an exercise room and a wine cellar.
The couple also own a £1.6million holiday home at the exclusive Mirasol Country Club in Palm Beach, Florida.


Life is just not fair.

Anonymous said...

This is not related to your post, but it's interesting because CISPA allows companies to share your data with the U.S. government if the company considers you a cyber threat or just doesn't like you.

CSC and CISPA: http://intelligence.house.gov/sites/intelligence.house.gov/files/documents/CSC113011.pdf

Anonymous said...

Has anyone heard / got news of the additional 31 redundancies in the UK Project Management Practice?

Anonymous said...

What about the massive layoffs in CSC Australia as part of the 'restructure'?

Anonymous said...

The chages at CSC must be at a layer that will not change. Middle and mid/upp mngmt should be accountable for the disgrace too. I refuse to believe that this and the previous CEO are 100% responsible for these numbers. A day only has 24h (and they spend most of it thinking about a way to cash their stock options); therefore they delegate almost all business responsibilities down the ladder. Layoffs are handpicked by the same guys that ruined contracts all around the globe not just the US. Moreover most of these arsonists are getting promoted.

Anonymous said...

More Redundancies in the UK being processed

Anonymous said...

What concerns me is there does not seem to be a real reorganization and cultural change. Where we are, the old management was just temporarily demoted to individual contributor status in order not to get fired. They are already lined up for new management positions and will be promoted by their cronies as soon as possible. There also will be no money for the lucky few that get promotions, since the demoted managers still earn their old salaries. This leaves a demotivated work force under a similar management.

But please let Mike Lawrie put his money where his mouth is, before he falls in the same trap as his predecessor. The plans are good, but they are not executed at lower levels.

Anonymous said...

What can be done about all this as the mid to upper management in the US are just picking names off a list of who should go. They don't even know who the person is and what they do. This seems very typical of US management who have no idea of what they are doing apart from looking after themselves. They are ruining peoples lives who they don't even know. Some of the people making the call on who has to go are reasonably new at CSC and are given a task to reduce numbers and offshore the jobs to India or other low cost locations. What they don't look at the long term costs of these decisions. Work is Offshored to India as it is cheaper staff costs but they don't look at the quality quantity of the work being done over there. If they replace one onshore person with a person in India and as we have found out needs to be redone back onshore to get the work done as it should have been done in the first place. The issue is that they have got rid of the onshore person so the poor buggers that are left onshore will need to do their normal work plus what the Indian screw up. Then they are got rid of and their will be no one to redo the work. Soon these people making these decisions will fall on their own swords. I will be looking on from the outside and having a good giggle as this happens. It it wasn't so serious what they are doing to peoples lives who have given a large part of their working life and working extremely long hours affecting their personal lives then we could all laughter at the disaster that is CSC. Maybe it is about time that the market took action (Class action against CSC Global and Mike Lawrie to stop CSC going under).