Computer Sciences Corp.'s (CSC) fiscal fourth-quarter profit
more than doubled on tax-audit settlements as the
information-technology company reported weaker revenue because of
the stronger dollar.
"Our commercial business appears to have stabilized at the
levels achieved in the fourth quarter," said Chairman and Chief
Executive Michael Laphen.
Shares were up 4.5% to $38.81 in after-hours trading as earnings
excluding items topped expectations. The stock has been rebounding
from its 14-year low of $23.93 in November.
IT providers have a steady stream of recurring revenue from
long-term contracts, which help mitigate the effects of the
recession on profits. CSC has shown strength in its contract
signing and solid pricing, according to Fitch Ratings, which
affirmed its BBB+ investment-grade credit ratings on the company
last week.
For the quarter ended April 3, CSC reported a profit of $382.3
million, or $2.51 a share, up from $181.7 million, or $1.15 a
share, a year earlier. The latest period had a net 99-cent gain
while the prior year had 29 cents in restructuring costs.
Revenue fell 8.3% to $4.11 billion, but would have risen 0.4% in
constant currencies.
Analysts polled by Thomson Reuters expected per-share earnings
of $1.47 on revenue of $4.2 billion.
Operating margin rose to 10.9% from 10%.
The company received nearly $3.47 billion in new awards during
the quarter, with the fiscal-year total up 4%.
Looking ahead, CSC expects 2010 fiscal year per-share earnings
of $4.20 to $4.30 on revenue of $16 billion to $16.5 billion, while
Wall Street expected per-share earnings of $4.08 on revenue of
$16.4 billion.
-By John Kell, Dow Jones Newswires; 201-938-5285;
john.kell@dowjones.com