Computer Sciences Corp. (NYSE: CSC) missed consensus earnings estimates in the third quarter.
After market close Monday, the technology services provider reported fiscal third-quarter net income of $122.9 million, or 72 cents per share, excluding special charges. Thirteen analysts surveyed by earnings tracking firm First Call produced a consensus profit forecast of 74 cents per share for Computer Sciences' quarter ended Dec. 29.
Third-quarter revenue increased 12.9 percent year-over-year to $2.66 billion. First Call consensus predicted revenue of $2.67 billion. "We are pleased with our financial performance for the third quarter during a challenging and turbulent period for IT service providers," said Van B. Honeycutt, chairman, president and CEO of Computer Sciences.
The company's earnings were hurt by currency effects, severance costs related to job cuts in the company's global consulting practices unit and lower-than-expected sales of software for the healthcare market, Honeycutt said.
Federal government business led CSC's growth. That segment generated third-quarter revenue of $647.5 million, up 19.1 percent year-over-year. Civil agencies' revenue increased 22.2 percent to $248.1 million, on the back of contracts with the Internal Revenue Service, General Services Administration and other departments. Revenue from the Department of Defense rose 17.2 percent to $399.4 million.
Commercial revenue gained 11.1 percent year-over-year to $2 billion, including $999.6 million from North America and $314.2 million from international areas except for Europe. Third-quarter revenue from Europe rose 7.5 percent to $654.3 million; European revenue rose 24.2 percent if currency effects are discounted.
Computer Sciences won $1.8 billion in contracts during the third quarter.
Including restructuring charges of $84.2 million, Computer Sciences in the third quarter earned $65.6 million, or 38 cents per share.
Shares of Computer Sciences fell $2.86 to $59.40 in Monday's regular trading ahead of the earnings report.>