Why Is DXC Technology Stock Tumbling Friday?

DXC Technology DXC shares are down Friday morning after the company reported financial earnings for the fourth quarter and issued weak guidance.

The Details: After market close on Thursday, DXC reported financial results for the fourth quarter, including adjusted EPS of 97 cents, beating analyst estimates of 83 cents.

In addition, DXC announced sales of $3.38 billion beating analyst estimates of $3.36 billion. This figure represents a 5.7% year-over-year decrease.

The company announced financial results for the full 2024 fiscal year as well with total revenue at $13.67 billion and adjusted EPS at $3.13.

DXC issued guidance for the first quarter and 2025 fiscal year. For the first quarter, the company expects revenue to be between $3.1 billion and $3.15 billion versus analyst estimates of $3.301 billion. Also, DXC Technology sees adjusted EPS from 55 cents to 60 cents versus analyst estimates of 76 cents.

The company expects 2025 fiscal year adjusted EPS to be between $2.50 and $3.00 versus analyst estimates of $3.49. DXC expects revenue from $12.67 billion to $12.95 billion versus estimates of $13.19 billion.

Following the earnings report, multiple analyst announced price target changes:

• Stifel analyst David Grossman maintains DXC Technology with a Hold and lowers the price target from $21 to $19.
• Susquehanna analyst James Friedman maintains the company with a Neutral and lowers the price target from $22 to $15.
• BMO Capital analyst Keith Bachman maintains DXC Technology with a Market Perform and lowers the price target from $23 to $17.5.
• RBC Capital analyst Daniel Perlin maintains the company with a Sector Perform and lowers the price target from $24 to $18.

Separately, DXC Technology announced that it will work with Ferrovial FER and Microsoft MFST to create a new generative artificial intelligence platform.

Quercus, which uses platform engineering principles as its foundations, will help organizations around the world to integrate secure, responsible AI solutions throughout their business operations to automate processes for improved profitability and efficiency.

“With DXC and Microsoft, we aim to roll out this platform widely across the market to optimize processes, generate designs, simplify applications for employee’s health and safety, and, generally, improve operations,” said Dimitris Bountolos, CIIO of Ferrovial.

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“It will also enable us to accelerate the transformation of our own operations and has already helped us to evolve our AI market offering from a project-based approach to industrialized capabilities that foster greater innovation and business value.”

DXC Price Action: At the time of writing, DXC Technology is down 16.5% at $16.66 according to data from Benzinga Pro.

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