IT services provider Computer Sciences Corp. today reported a 2 percent rise in revenue for its first fiscal quarter of 2003 in reaching $2.76 billion compared with the same quarter last year.
Net income for the quarter reached $79 million, compared with $47.7 million in the year-ago quarter. Earnings per share were up 64 percent at 46 cents a share, compared with 28 cents a share in last years same quarter.
The El Segundo, Calif., firm attributed its revenue increase to a rise in its federal government activities, which were up 18 percent in the quarter. CSC recorded revenues of $791.7 million from the government sector—up 17.6 percent over the same quarter last year.
"DOD revenue benefited from significant increases in intelligence community activity. The pipeline of federal government opportunities is $25 billion," declared CSC Chairman and CEO Van B. Honeycutt. Of that $25 billion, CSC expects $12 billion of it to close within its fiscal year.
Outsourcing, which accounted for 77 percent of CSCs business, grew by 11 percent, offsetting continued declines in consulting and systems integration. Despite the industry-wide slump in consulting and systems integration, CSC managed to improve profitability within that business unit--thanks to its continued focus on vertical markets and efforts to improve utilization in the United States.
To better position itself to go after the demand increases from the federal government for IT services, CSC created a new organizational division, dubbed the Enforcement, Security and Intelligence Division.
The new division, targeted at the proposed Department of Homeland Security, will focus on IT services for federal law enforcement, public safety and security, and U.S. intelligence agencies.
Honeycutt estimated that its second fiscal quarter of 2003, ending September 30, will yield earnings per share "in the mid 50 cent range and revenue growth in the low single digits," he said. For the full fiscal year, CSC expects to generate revenue growth at about 6 to 8 percent and earnings per share in the range of $2.73 to $2.88.
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