Tuesday January 26, 4:16 pm Eastern Time
Where the heck is everybody? Good Luck To all!
Company Press Release
SOURCE: Computer Sciences Corporation
CSC Reports Third Quarter Earnings of 54 Cents Per Share
EL SEGUNDO, Calif., Jan. 26 /PRNewswire/ -- Computer Sciences Corporation (NYSE: CSC - news) reported that earnings per share for its fiscal 1999 third
quarter (ended January 1, 1999) increased 22.7% to 54 cents per share (diluted) from 44 cents per share for last year's third quarter.
Net income for the current quarter was $87.0 million, an increase of 25.9% over the $69.1 million reported a year ago. Revenues for the fiscal 1999 third quarter rose
15.9% to $1.93 billion from $1.66 billion for the prior year period.
''These strong third quarter results reflect our solid operating performance,'' said Van B. Honeycutt, CSC's chairman, president and chief executive officer. ''Strong
revenue gains were recorded by our European operations, our consulting and systems integration services, and our financial services vertical market activities.
''As expected, we also benefited somewhat from lower net interest costs, due principally to our aggressive cash management program, and a loier income tax rate.''
For the nine month period, net income rose 24.5% to $224.4 million from last year's $180.3 million, which included a net special credit of $1.7 million, or 1 cent per
share. Excluding the net special credit, earnings per share for the nine months increased 23% to $1.39 per share from $1.13 per share (diluted) for the prior year
period. Revenues totaled $5.53 billion, up 16.9% from the $4.73 billion reported for the first nine months of the 1998 fiscal year.
European revenue for the quarter increased 29.4% to $608.5 million from $470.4 million for last year's third fiscal quarter. Consulting engagements and outsourcing
contracts in the United Kingdom contributed significantly to revenue as did consulting and systems integration and enterprise-wide solutions at CSC Ploenzke, a
leading European information technology consultancy headquartered in Germany. Additionally, CSC France posted increased revenue due, in part, to this quarter's
acquisition of KPMG Peat Marwick SA, one of France's largest management consulting firms. Other international revenue totaled $120.5 million for the quarter, up
19.8% from the $100.6 million posted for the prior year's third quarter.
Revenue from the U.S. federal sector for the quarter increased 8.6% to $413.4 million from $380.8 million for the fiscal 1998 third quarter. The revenue growth
came from new contracts, additional revenue from previously announcedtrontracts, and from an acquisition made during last year's fourth quarter. Honeycutt added
that the quarter's federal revenue growth reflected a particularly strong contribution from the civil market, and was driven by new contract wins and additional task
orders from existing awards. The solid civil market performance was partially offset by the winding down of some contracts for the Department of Defense.
For the quarter just ended, U.S. commercial revenue rose to $785.5 million, an increase of 10.3% from the $712.3 million in the third quarter of last year. Last year's
results included activities in the company's telecommunications and collections operations which were subsequently sold or phased out. Without these revenues, the
quarter-to-quarter revenue increase was 15.8%. The growth came primarily from outsourcing revenue increases and continued expansion in the financial services and
healthcare vertical markets and consulting and systems integration activities.
''So far this fiscal year we have announced $4.4 billion in U.S. commercial, federal and international awards, and our prospects continue strong for the fourth quarter
and for next year. It is important to note that this total does not include our December 1998 award by the Internal Revenue Service to modernize our nation's income
tax system. While the value of this opportunity is difficult to estimate, we anticipate that over the life of the contract several billion dollars in revenue will result for
CSC. This contract is one of the largest awards in our history and will be a major contributor to our future federal growth,'' added Honeycutt.
Computer Sciences Corporation helps clients in industry and government use information technology to attain strategic and operational objectives. The company
develops individualized business solutions that are delivered by CSC's 47,000 employees in 700 offices worldwide in areas such as information technology
management consulting, systems consulting and integration, operations support and information services outsourcing. Since its founding in 1959, CSC has been
known for its flexibility in its relationships with clients. The company has no exclusive agreements with hardware or software technology companies and thus is able to
identify and manage solutions specifically tailored to each client's needs. Headquartered in El Segundo, California, CSC had revenues of $7.4 billion for the twelve
months ended January 1, 1999. For more information, visit the company's web site at www.csc.com.
All statements contained in this or any other press release of the Company, or in any document filed by the Company with the Securities and Exchange Commission,
or in any other written or oral communication by or on behalf of the Company, that do not directly and exclusively relate to historical facts constitute
''forward-looking statements'' inthin the meaning of the Private Securities Litigation Reform Act of 1995. These statements represent the Company's expectations
and beliefs, and no assurance can be given that the results described in such statements will be achieved.
These statements are subject to risks, uncertainties and other factors, mafy of which are outside of the Company's control, that could cause actual results to differ
materially from the results described in such statements. These factors include, without limitation, the following: (i) competitive pressures; (ii) the Company's ability
to attract and retain key personnel; (iii) changes in the demand for information technology outsourcing and business process outsourcing; (iv) changes in the financial
condition of the Company's major commercial customers; (v) changes in U.S. federal government spending levels for information technology services; (vi) the
Company's ability to consummate strategic acquisitions and alliances; (vii) the future profitability of the Company's customer contracts; (viii) the Company's ability to
continue to develop and expand its service offerings to address eierging business demand and technological trends; and (ix) general economic conditions in countries
in which the Company does besiness.
Revenue By Market Sector
Third Quarter
Jan. 1, Dec. 26, % of Total
In millions 1999 1997 FY 99 FY 98
U.S. commercial $785.5 $712.3 41% 43%
Europe 608.5 470.4 31 28
Other international 120.5 100.6 6 6
Global commercial 1,514.5 1,283.3 78 77
Department of Defense 244.5 251.1 13 15
Civil agencies 168.9 129.7 9 8
U.S. federal government 413.4 380.8 22 23
$1,927.9 $1,664.1 100% 100%
Nine Months Ended
Jan. 1, Dec. 26, % of Total
In millions 1999 1997 FY 99 FY 98
U.S. commercial $2,247.9 $1,996.9 41% 42%
Europe 1,640.0 1,260.0 30 27
Other international 343.9 303.1 6 6
Global commercial 4,231.8 3,560.0 77 75
Department of Defense 810.2 772.1 14 16
Civil agencienc 487.6 399.6 9 9
U . federal
government 1,297.8 1,171.7 23 25
$5,529.6 $4,731.7 100% 100%
(Figures shown herein are unaudited)
Consolidated Statements of Income
Third Quarter Nine Months Ended
Jan. 1, Dec. 26, Jan. 1, Dec. 26,
In millions, except
per-share amounts 1999 1997 1999 1997
Revenues $1,927.9 $1,664.1 $5,529.6 $4,731.7
Costs of services 1,496.1 1,301.9 4,329.4 3,704.3
Selling, general and
administrative .9 179.9 145.5 515.4 432.3
Depreciation and
amortization 113.1 98.6 322.5 283.3
Interest, net 8.4 11.5 25.9 32.0
Special charges (a) 208.4
Total costs and
expenses 1,797.5 1,557.5 5,193.2 4,660.3
Income before taxes 130.4 106.6 336.4 71.4
Taxes on income (a) 43.4 37.5 112.0 (108.9)
Net income $87.0 $69.1 $224.4 $180.3
Earnings per share
Basic $0.55 $0.44 $1.42 $1.17
Diluted $0.54 $0.44 $1.39 $1.14
Common shares
outstanding 158.536 155.502 157.965 154.662
Common shares
assuming dilution 161.998 158.594 161.741 157.956
(a) As previously disclosed, the results for the first quarter ended
June 27, 1997 included a net special credit of $1.7 million, or 1 cent
per share (diluted). The net credit resulted from a $208.4 million
special charge ($133.3 million after tax) and a $135.0 million income tax
benefit, both of which related to developments at an affiliated joint
venture during the first quarter.
(Figures shown herein are unaudited) |
