Computer Sciences Earnings Preview

Computer Sciences CSC will be reporting its fiscal fourth-quarter 2011 results Wednesday, May 25, after the closing bell. Analysts are looking for the technology services provider to post earnings of $1.16 per share on revenue of $4.2 billion. That compares to $1.66 per share and $4.2 billion in the same period of last year. The consensus earnings estimate has fallen from $1.56 per share 30 days ago. The Company Falls Church, Virginia-based Computer Sciences Corporation provides information technology (IT) and business process outsourcing, as well as IT and professional services to the commercial and government markets. The company is a major government and defense contractor—about 40% of its revenues come from U.S. federal agencies. It has operations in North America, Europe, and the Asia-Pacific region, including India and Australia. Computer Sciences completed its acquisition of Image Solutions in January and named a chief diversity officer in March. Full-Year Expectations For the full year, analysts expect to see earnings down 7.9% year-over-year to $4.86 per share and revenue of $16.2 billion, or about the same as a year ago. Note that Computer Sciences earnings have not fallen short of consensus estimates in the past eight quarters. Performance Computer Sciences has a dividend yield of 1.6% and a return on equity of 15.7%. Its price-to-earnings ratio is less than the industry average. The stock plunged in February and again in May after the company lowered its EPS guidance. The share price is down about 12% since the beginning of the year, but at $43.59 is still well above the 52-week low of $39.61. Still, the stock has underperformed the industry average, as well as competitor Accenture ACN, year to date.