Zacks Analyst Blog Highlights: CSC, Accenture, Hewlett-Packard, CA and Viacom - Press Releases

For Immediate Release

Chicago, IL – June 2, 2010 – Zacks.com Analyst Blog features: CSC Inc. (CSC), Accenture (ACN), Hewlett-Packard (HPQ), CA Inc. (CA) and Viacom Inc. (VIA.B).

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Here are highlights from Tuesday’s Analyst Blog:

CSC Wins Government Deals

CSC Inc. (CSC) continues with its trend of winning new deals. This ability is expected to help the company achieve new heights in its business and scale up business volume. After winning and extending several contracts during the earlier half of the month, the company has recently grabbed a $33.0 million contract from the U.S. Navy.

As per the terms of the agreement, CSC will be providing information technology (IT) support to the Naval Surface Warfare Center (NSWC) and the Naval Support Activity. This apart, the company will also provide network and administrative support to the client. This contract has a base period of two years, along with three one-year renewal options, bringing the total period to five years.

This apart, the company grabbed a second contract for an estimated value of $25.0 million from the Space and Naval Warfare Systems Center Atlantic. As per the terms of the contract, CSC will provide integrated network services to naval fleet users situated at overseas locations. The contract has a one-year base period and also provides for four one-year extensions.

So it is evident that the company is seeing significant success in the government vertical. This is encouraging, since this segment typically enables steady flow of revenue and is, therefore, relatively stable.

CSC’s innovative solutions, new product offerings, aggressive growth strategy and customer friendly approach are helping it win new business deals. This apart, the company’s established business relationship with government departments is an added bonus, providing a competitive advantage over others.

Things look encouraging for CSC, although the company is facing stiff competition from technology giants like Accenture (ACN), Hewlett-Packard (HPQ) and CA Inc. (CA). On the positive side, CSC reported decent fourth quarter results and provided a positive outlook for fiscal year 2010.

Viacom Downgraded to Neutral

We downgrade our recommendation for Viacom Inc. (VIA.B) to Neutral due to continuing downturn in the U.S. box-offices. Ticket sales for the 2010 Memorial Day week was around $187 million, down 16% year-over-year.

Viacom’s first quarter 2010 revenue from the Filmed Entertainment segment was down 18% year-over-year. Worldwide home entertainment revenue was down 34% year-over-year. Theatrical revenue was down 6% year-over-year. Worldwide television license fees decreased 16% year-over-year.

Overall financial result in the first quarter 2010 was also below the Zacks Consensus Estimates. This was primarily due to fewer films released by Paramount Pictures and ongoing slump in DVD sales. We do not expect any immediate turnaround in the U.S. movie industry.

Nevertheless, an improving U.S. economy and strong rating for the cable TV channels will help Viacom generate healthy revenue growth from advertising and affiliate fees. Rise in advertisement expenditure by several enterprises is likely to benefit Viacom in future reporting quarters.

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