CSC's (CSC) fiscal first-quarter profit climbed 5.6% as the
information-technology company posted higher margins despite lower
revenue and recorded a tax benefit.
Looking ahead, the company raised its per-share earnings target
to $4.80 to $5 from $4.20 to $4.30 due to the reduction of its tax
rate. It affirmed its revenue outlook.
CSC, which had been known as Computer Sciences Corp., changed
its name last year as part of a five-year marketing and advertising
campaign. Shares were up 1.8% at $49.50 in after-hours trading. The
stock is up nearly one-third this year.
Chairman and Chief Executive Michael Laphen said the company
anticipated "modest improvement in the economy," driving an
increase in short-term projects in the second half of the year.
Recurring revenue from long-term contracts has helped CSC report
solid earnings despite contraction in IT spending. In June,
Standard & Poor's Ratings Service said CSC maintained a strong
operating performance and good market position through its diverse
business and geographic mix.
For the quarter ended July 3, CSC reported earnings of $133
million, or 85 cents a share, up from $126 million, or 79 cents a
share, a year earlier. The latest period included an 11-cent tax
benefit.
Revenue slid 12% to $3.9 billion, with half the drop due to
currency changes.
Analysts polled by Thomson Reuters expected per-share earnings
of 51 cents on revenue of $3.89 billion.
Operating margin improved to 6.8% from 6.4%.
The company received $3.51 billion in new awards during the
quarter, down 35% from a year ago.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com