CSC Reports First Quarter Results
News Release -- August 11, 2010
Solid Performance, Reaffirms Guidance
FALLS CHURCH, Va., August 11 – CSC (NYSE: CSC) today reported first quarter fiscal 2011 Revenue of $3.94 billion and fully diluted earnings per share (EPS) of $0.91 compared to first quarter fiscal 2010 Revenue of $3.90 billion and EPS of $0.85.
Highlights for the Quarter include:
- New business awards of $3.2 billion for the quarter compared to $3.5 billion for the previous year.
- Pre-tax margin of 5.45% for the quarter, an increase of 71 basis points from the previous year.
- Operating margin of 7.13% for the quarter, an increase of 32 basis points from the previous year.
- Operating cash flow of -$60 million for the quarter, an improvement of $237 million from the previous year.
- Free Cash Flow of -$318 million for the quarter, an improvement of $144 million from the previous year.
Commenting on the results, CSC Chairman and Chief Executive Officer, Michael Laphen said, “I am pleased with our operational improvements and the corresponding financial results, particularly the margin and cash flow performance. We remain focused on delivering positive results while navigating a still uncertain macro economic environment.”
New Business Awards
Across the three lines of business, new business awards for the quarter were $3.2 billion. North American Public Sector (NPS) contributed approximately $1.2 billion, Business Solutions & Services (BSS) reported $0.8 billion, and Managed Services Sector (MSS) closed $1.2 billion of new business.
“I am encouraged by the size and quality of our current pipeline,” said Laphen. “We are seeing increased demand emerging from some regions and within some industries. Our strategic targets of Cloud, Cyber and Healthcare, as well as network management are all indicating positive signs. Although our businesses are impacted by the overall sluggish recovery and, to a lesser extent government spending, we have a very robust backlog and I remain optimistic that we will realize meaningful growth beginning in the second half of our fiscal year.”
The Company reconfirmed guidance for the full year as follows:
Bookings in excess of $18 billion, revenue in the range of $16.8 billion to $17.2 billion, operating margin between 9% and 9.25%, EPS in the $5.30 to $5.40 range, and Free Cash Flow in excess of 90% of net income attributable to CSC common shareholders.
Lines of Business
For the quarter, NPS Revenue was $1.55 billion (up 2.2% from first quarter last year), MSS Revenue was $1.60 billion (up 2.2% from first quarter last year) and BSS Revenue was $0.82 billion (down 2% from first quarter last year).
Conference Call and Webcast
CSC senior management will host a conference call and Webcast at 11:00 a.m. EDT today. The conference call dial-in number for domestic callers is 888-352-6793. International callers will need to dial +1 719-325-2106. The pass code for all participants is 3379040. The Webcast and presentation slides can be accessed at www.csc.com/investor_relations.
In an effort to provide investors with additional information regarding the Company’s results as determined by generally accepted accounting principles (GAAP), the company has also disclosed in this press release non-GAAP information which management believes provides useful information to investors, including: operating income, operating margin, free cash flow and free cash flow as a percentage of net income attributable to CSC common shareholders. A reconciliation of the adjustments to GAAP results for this quarter and prior periods, as well as the rationale for management’s use of non-GAAP measures, is included in the tables below.
CSC is a global leader in providing technology-enabled solutions and services through three primary lines of business. These include Business Solutions & Services, the Managed Services Sector and the North American Public Sector. CSC’s advanced capabilities include system design and integration, information technology and business process outsourcing, applications software development, Web and application hosting, mission support and management consulting. Headquartered in Falls Church, VA., CSC has approximately 95,000 employees and reported revenue of $16.2 billion for the 12 months ended July 2, 2010. For more information, visit the Company’s Web Site at www.csc.com.
All statements in this press release and in all future press releases that do not directly and exclusively relate to historical facts constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements represent the Company’s intentions, plans, expectations and beliefs, and are subject to risks, uncertainties and other factors, many of which are outside the Company’s control. These factors could cause actual results to differ materially from such forward-looking statements. For a written description of these factors, see the section titled “Risk Factors” in CSC’s Form 10-K for the fiscal year ended April 2, 2010 and any updating information in subsequent SEC filings. The Company disclaims any intention or obligation to update these forward-looking statements whether as a result of subsequent event or otherwise, except as required by law.
Note to Analysts and Editors: Please see attached PDF for print. 272 KB