But by the close, the stock ended the regular session up 30 cents to $33 on the New York Stock Exchange.
On Friday, Computer Sciences warned that it will miss estimates for the fourth quarter by a wide margin and lay off about 1 percent of its work force, or around 900 people.
In a conference call with analysts, CEO Van Honeycutt said the company will take a restructuring charge of between $100 million and $150 million, 40 percent of which will be related to severance charges.
Fourth-quarter earnings are now expected to be between 35 cents and 37 cents a share, with revenue growing between 11 percent and 13 percent from the same period last year.
Fiscal 2002 earnings should be between $2.50 and $2.60 a share, Honeycutt said. First Call consensus was for a $2.60 per-share profit.
Honeycutt said that about 40 percent of the fourth-quarter shortfall is attributable to a slowdown in worldwide consulting and systems integration. Sluggish sales in health care licensing and services and a few issues in accounts receivable--clients who are paying their bills slowly or not at all--accounted for the rest.
Honeycutt said he's not looking for the situation to turn around soon; systems integration work and global consulting "really isn't going to recover till third quarter or the first quarter of next year," he said.
After Friday's news, analysts were quick to cut estimates on the stock and raised red flags about Computer Sciences' ability to compete in a tough market. Lehman Brothers, SG Cowen, Goldman Sachs and Bear Stearns all cut earnings estimates on the stock.
Lehman Brothers analyst Karl Keirstead lowered his price target on the stock from $65 to $40 and cut fiscal 2002 earnings estimates to $2.10, well below the company's guidance of $2.50 to $2.60 per share.
"While the market environment is certainly more challenging, we are not prepared to blame the shortfall entirely on the demand backdrop and we are certainly not prepared to reach the simple knee-jerk conclusion that every other large services company must be seeing the same degree of weakness," he wrote.
Instead, he wrote, the problems are likely linked to "a poorly positioned consulting and systems integration unit."
Margin pressures were also of concern to analysts. CSC said on the conference call that it has experienced pricing pressure from two clients in its outsourcing business, but it said the problem was limited to them.