MAYBE ALYDAAR WILL GET SOME OF THESE CONTRACTS. JUST DREAMING.
Computer Sciences Sales Seen Rising 20%, Analyst Says
San Francisco, Dec. 4 (Bloomberg) -- Computer Sciences Corp.'s sales will rise by about 20 percent next year, fueled by several large commercial computer services contracts, an analyst said.
Merrill Lynch & Co. named the company, the third-biggest U.S. provider of computer consulting and maintenance services, as its top high-tech stock pick for 1999. Stephen McClellan with Merrill's San Francisco office, said Computer Sciences is well- positioned to land highly profitable contracts as big companies look for outside help in managing computer systems to cut costs and get their systems ready for the year 2000.
''I'm convinced they have a couple of big commercial deals in the bag that they're going to announce imminently,'' said McClellan, who raised his rating to ''long-term buy'' from ''near- term buy'' today.
Shares of El Segundo, California-based CSC rose 3 to 60 in trading of 1.51 million, exceeding the three-month daily average of 1.15 million. The shares have fallen from a 52-week high of 73 1/8 on Sept. 22.
French newspapers have reported Alcatel SA, the French telecommunications equipment maker, plans to hire CSC to run its computer systems, an agreement McClellan estimates will be valued at about $500 million. Alcatel probably will award the contract in the next month, he said.
In addition, CSC is on one of two teams competing for a U.S. Internal Revenue Service contract valued at as much as $5 billion over 15 years. The IRS is scheduled to announce the winning bid on Dec. 10.
Meanwhile, CSC is competing against International Business Machines Corp. and Electronic Data Systems Corp. for a $1.5 billion agreement with the state of Connecticut.
Even if it loses the two government contracts, CSC still is likely to win one or two other commercial ''megacontracts'' -- agreements worth more than $500 million over 10 years -- in the next few months.
Those awards will spur annual growth of 20 percent to 22 percent for its fiscal year that begins in April, McClellan said.
For the current fiscal year, he expects sales to increase 18 percent from the $6.6 billion reported last year.
16:36:42 12/04/1998 |
