CSC Gains Despite Q3 Report

Computer Sciences Corp. (NYSE: CSC) was up 30 U.S. cents at $59.70 early Tuesday, even after reporting quarterly results that missed analyst estimates.

Company officials also reportedly said on a conference call with investors that results for the current quarter could be at the low end of expectations.

Wit SoundView, however, reportedly reiterated a buy recommendation on CSC shares.

The El Segundo, California provider of information technology services said that revenue for the third quarter ended December 29th rose 12.9 percent from a year earlier to $2.7 billion.

CSC chairman, president and chief executive officer Van B. Honeycutt said the revenue growth came mainly from government contracts and commercial business.

Income before special items totaled $122.9 million, or 72 cents per share, compared with 66 cents per share a year earlier. Analysts were looking for income of 74 cents per share before special items. Net income fell to $65.6 million, or 39 cents per share, from $82.3 million, or 49 cents.

The company said that currency exchange rates, severance costs for fired employees and lower-than-expected licensing sales for healthcare software hurt results during the quarter.

"We have responded to these market factors by swiftly implementing additional cost-containment activities," said Honeycutt.

Latest-quarter results included $84.2 million in charges for restructuring the company's financial services business after the acquisition of Mynd Corp.

"We are ahead of last year's major new business award pace, having announced $9.9 billion so far in the current fiscal year, and with a strong opportunity pipeline in both the commercial and federal markets, we anticipate closing out another year of solid results," Honeycutt said.

Honeycutt added that the value of business from government will be $22 billion over the next 26 months.

"We are addressing a robust federal market pipeline of opportunities," he said. "We anticipate more opportunities from this market to develop as the federal government increasingly looks to the private sector for commercial best practices as it emphasizes its modernization efforts."